Pimco and Oaktree eye Arini debt holdings as hedge fund losses hit 26%

Arini has received bids for some of its high-yield debt holdings from major asset managers including Pimco and Oaktree, as the hedge fund seeks to raise liquidity following steep losses in its flagship strategy, according to Bloomberg. The credit manager, founded by former Credit Suisse trader Hamza Lemssouguer, has already sold positions in several large speculative-grade borrowers, while dealers are reportedly holding discussions with prospective buyers over further disposals. Arini is primarily targeting its more liquid and better-performing holdings, including debt issued by travel technology company Sabre, although discussions remain preliminary.

The sales come as Arini's flagship hedge fund, which managed $7.5bn at the end of July, recorded losses of approximately 26% for the year through 23 October. Rising global interest rates, higher energy prices and concerns over AI-related disruption have weighed heavily on lower-rated corporate debt, putting pressure on credit-focused hedge funds with concentrated positions. The latest drawdown puts the flagship strategy on course for its first annual loss, following several years of strong returns from investments in distressed and relatively illiquid corporate debt.

Arini has grown rapidly since launching in 2022, expanding from $1bn to approximately $21.7bn in assets under management. Despite the downturn, the firm continues to attract investor capital, having raised $1.5bn earlier in October, with more than $400m already allocated. Arini has also reopened its flagship strategy to additional commitments from existing investors.

The potential asset sales highlight growing opportunities for established credit investors to acquire high-yield securities as distressed hedge funds seek liquidity, with Pimco and Oaktree among the managers exploring purchases amid the broader market dislocation.