Tuesday, 16 September 2014
Last updated 5 hours ago
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.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
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