Saba, Pine River Buy Discounted Closed-End Debt Funds

Mar 3 2014 | 10:41am ET

A pair of prominent hedge funds are finding the discounts at closed-end mutual funds irresistible.

Saba Capital Management and Pine River Capital Management have invested more than $1 billion in closed-end debt funds, Bloomberg News reports. Saba has been the much more active of the two, investing $847.3 million since last year, according to regulatory filings.

Among the funds favored by the two firms are those managed by giants BlackRock and Pacific Investment Management Co.

Traditional closed-end debt fund investors have been fleeing the vehicles after the Federal Reserve began to taper its stimulus programs last year. Those outflows have led to the biggest discount to net-asset values in five years, according to Thomas J. Herzfeld Advisors; Pine River's purchases averaged a 9.1% discount.

It is unclear what Saba and Pine River plan for the funds. While they could be betting on a bounce-back from the depths, activist hedge funds in the past have sought to remove closed-end funds' management or to have the funds liquidated, to capitalize on the NAV discount.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.