Key Takeaways
- • Arini Capital's $7.3 billion flagship fund lost about 15.7% year to date through September, according to people familiar with the matter, after prices fell on several of its largest distressed holdings.
- • The fund lost 7.44% in September alone, driven by declines in bonds and loans tied to Altice International, Brightspeed and Aston Martin.
- • Altice bond prices fell roughly 28% since July as creditors battled owner Patrick Drahi over control; Aston Martin's debt dropped a similar amount amid contentious restructuring talks.
- • Despite the drawdown, the flagship fund attracted $425 million of new outside investor capital in October.
- • Founder Hamza Lemssouguer, a former Credit Suisse corporate-debt trader, has built the London-based firm into one of Europe's fastest-growing managers, with roughly $22 billion raised since its 2022 launch.
Summary
Arini Capital, the London-based hedge fund founded by former Credit Suisse corporate-debt trader Hamza Lemssouguer, lost about 15.7% in its flagship fund through September this year, according to people familiar with the matter. The losses followed price declines in several of the fund's largest investments, which concentrate on distressed corporate debt. The firm, which specializes in corporate debt, has grown rapidly since its 2022 launch and has amassed around $22 billion in total assets across its strategies, making it one of Europe's fastest-growing fund managers.
The flagship fund, valued at $7.3 billion, lost 7.44% in September alone. Sources attributed the monthly decline to falling prices on bonds and loans the fund holds in distressed companies, including telecommunications providers Altice International and Brightspeed, and carmaker Aston Martin. Altice bond prices have dropped about 28% since July as creditors contested control with owner Patrick Drahi, while Aston Martin's debt fell by a similar magnitude amid contentious debt restructuring negotiations.
Lemssouguer, known for his mathematical approach and for taking large stakes in companies in turmoil, has experienced significant volatility before. The flagship fund lost about 16% during its first year, rebounded to a 4% gain, and fell roughly 8% in early 2024 before finishing that year up 20.8%. In a recent letter to investors, Arini said such swings should be expected and do not signal deteriorating investments. "We do not believe it is an indicator of soured investments, but rather part of the process—being contrarian is a necessary condition for this opportunity set," the firm wrote, adding that "the periods of greatest opportunity can also involve substantial mark-to-market volatility."
Despite the recent performance, outside investors continued to commit capital. The flagship fund took in $425 million in October, according to the people familiar with the matter. The Wall Street Journal's coverage of the story was also cited in the original reporting, and the Financial Times had previously reported on the fund's performance.
The flagship fund, valued at $7.3 billion, lost 7.44% in September alone. Sources attributed the monthly decline to falling prices on bonds and loans the fund holds in distressed companies, including telecommunications providers Altice International and Brightspeed, and carmaker Aston Martin. Altice bond prices have dropped about 28% since July as creditors contested control with owner Patrick Drahi, while Aston Martin's debt fell by a similar magnitude amid contentious debt restructuring negotiations.
Lemssouguer, known for his mathematical approach and for taking large stakes in companies in turmoil, has experienced significant volatility before. The flagship fund lost about 16% during its first year, rebounded to a 4% gain, and fell roughly 8% in early 2024 before finishing that year up 20.8%. In a recent letter to investors, Arini said such swings should be expected and do not signal deteriorating investments. "We do not believe it is an indicator of soured investments, but rather part of the process—being contrarian is a necessary condition for this opportunity set," the firm wrote, adding that "the periods of greatest opportunity can also involve substantial mark-to-market volatility."
Despite the recent performance, outside investors continued to commit capital. The flagship fund took in $425 million in October, according to the people familiar with the matter. The Wall Street Journal's coverage of the story was also cited in the original reporting, and the Financial Times had previously reported on the fund's performance.
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