Boaz Weinstein’s Saba Capital Management is reportedly preparing a new investment vehicle to acquire struggling private credit funds. The firm aims to raise approximately $1 billion over coming weeks, targeting funds whose values have come under pressure as investors seek liquidity. This fundraising initiative marks a notable expansion of Saba’s investment activities.
The new fund will significantly broaden Saba’s focus into both public and private business development corporations (BDCs) and interval funds. BDCs secure capital from investors to lend to small- and mid-sized companies, akin to a bank, often to riskier firms unable to secure federally insured financing. Private credit faces increasing scrutiny from regulators as high-profile losses jolt markets and future return expectations sag, a climate Weinstein summarises as “buying pessimism.”
This strategic decision follows Saba and Cox Capital Partners’ recent tender offers for stakes in Blue Owl Capital and Starwood Real Estate Income Trust, which concluded last week. The firms acquired $10 million in aggregate face value, primarily from Starwood REIT, across 190 separate trades. Investors in the Blue Owl fund tendered less than one per cent of shares, with Blue Owl having urged its investors against selling.
While the overall volume of tenders was below initial expectations, sources close to Saba view the results as a meaningful validation of their thesis. Weinstein’s move to raise the new vehicle is fuelled by demand from wealth advisors whose clients are seeking liquidity from their illiquid private BDC and interval fund investments. The prominent investor asserts that private credit is facing significant stress, leading investors to actively seek exit opportunities.
