Hedge-fund firms Saba Capital Management LP and Pine RiverCapital Management are piling into closed-end debt funds with shareprices that plunged below the value of their assets by the mostsince the credit crisis.

Saba, the $3.9 billion manager run by Boaz Weinstein, hasamassed at least $847.3 million in the publicly traded funds afterit started buying them last year, moving into an area traditionallydominated by individual investors, regulatory filings show. PineRiver purchased $159.6 million of shares that on average fell asmuch as 9.1 percent below their holdings in December, the biggestgap since 2009 as measured by Thomas J. Herzfeld Advisors Inc.

Hedge-fund managers are seeking an edge in a market where theriskiest corporate debt is typically yielding 6.06 percent, 3percentage points less the average of the past decade. They'restepping into funds run by BlackRock Inc. and Pacific InvestmentManagement Co. (Pimco) after retirees and wealthy individuals fledlast year in the face of a Federal Reserve pullback from unprecedented stimulus.