HedgeCo.Net — Losses at Arini Capital Management’s flagship credit hedge fund have exceeded 26% this year, and margin calls from the banks that provide its leverage have pushed the London manager into asset sales reported to top $2 billion in face value over the past week, the Financial Times reported. The flagship runs about $7 billion of the firm’s roughly $22 billion in assets.
The sales follow roughly $800 million of debt disposals in prior weeks that The Wall Street Journal reported on October 30, when the fund was down more than 20% for the year as of mid-October. Arini has since cut positions in borrowers including Merlin Entertainments, Claritev and Sabre, along with more complex credit default swap exposures. Some rival hedge funds have reportedly built short positions against its largest holdings.
The hardest positions to exit are the most distressed. Arini holds about $2 billion of debt issued by Apollo-backed broadband operator Brightspeed, which is reported to be weighing a Chapter 11 filing, and has held sizeable stakes in Altice International, Aston Martin and The Very Group, where restructuring talks and trading restrictions can limit how quickly a holder can sell.
The concentrated approach worked for several years, with the flagship gaining about 27% in 2023, 21% in 2024 and 10% in 2025. The firm also raised $1.5 billion of new commitments for the strategy in October, including $425 million deployed at the start of the month, and remains open to more capital. Its CLO funds and recently closed European direct lending fund are separate vehicles and have not been reported as part of the strain.
The sequence is a familiar one for levered credit books: margin calls are met by selling the most liquid holdings first, which leaves a more concentrated and less tradable portfolio behind. For allocators, the questions are how much of the remaining book can be sold without moving prices, and how financing terms with prime brokers change if marks keep falling.