Private credit fund Arini’s performance tumbles
London-based credit investor Arini Capital Management has had a difficult year so far, with a number of soured bets pushing its flagship strategy to a loss as two of its top traders have left.
The London-based investor, which manages $22bn, has in recent years been at the centre of Europe’s thorniest distressed debt trades, using leverage to take big concentrated bets on struggling corporates, write Euan Healy, Costas Mourselas and Robert Smith.
Founded in 2021 by former Credit Suisse high-yield trader Hamza Lemssouguer, the contrarian approach has earned its master fund huge profits. Arini gained 27 per cent in 2023, 21 per cent in 2024 and 10 per cent last year.
Over its first four years, the credit investor earned a return of 73 per cent.
But a number of the 35-year-old Moroccan’s bets have deteriorated this year. Its flagship strategy has fallen to a loss of more than 8 per cent since the start of the year, the FT reported.
Large positions in the debt of distressed companies, including Aston Martin and Patrick Drahi’s Altice International, were its two largest losses for July.
Both have struck aggressive deals that shifted assets out of the reach of lenders in the past year, causing the price of their debt to crash. Both companies have been threatened with legal action by creditors including Arini.
During a difficult year for the fund, a number of senior traders including US chief executive Gavin Yates and Ben Elliott, another member of the investment team, have departed. Yates is set to join Citadel.
The fund sought to reassure investors in a letter about the July performance, telling them that its expectations about worst-case scenarios and timelines for its positions to come good were unchanged, and that it had doubled down on its highest-conviction trades.