Saba Projects Continuing Gains  

Hedge fund industry observers are buzzing of Saba Capital Management’s purported sharp gains, in addition to the firm’s projections of seeing additional returns of this caliber in the months ahead.

Boaz Weinstein, founder of Saba, shares that “Markets are at an unstable place right now. I look out at the next five months, and there are lots of known unknowns.” 

Weinstein describes his strategy largely as identifying price dislocations in derivative securities.  These securities are often implemented as a hedge against bond defaults.  

Weinstein historically had mixed success in trading. Although widely credited with helping to establish and transform Deutsche Bank’s derivatives desk, Weinstein sparked a $1 billion setback for DB amid the onset of the Financial Crisis. 

Saba Capital Management has now taken advantage of pricing dislocations when Weinstein eyed cheap credit default swaps.  This includes prices for credit defaults of United Airlines Holdings and McDonald’s Corp.  At the end of 2018, Saba’s total assets under management reached $1.6 billion. Through closed-end fund structures, the firm has also focused on securities that are trading at significant discounts in order to implement a strategy that can monetize these discounts. Industry watchers continue to eye Saba as it charts its path in the New Normal.