What changed
Hamza Lemssouguer's Arini Capital Management has reopened its credit playbook to fresh capital for the first time in two years, gathering $1.5 billion for the vehicle known as Arini Credit, a person familiar with the matter said. In the opening days of this month, over $400 million from that pool was deployed, with further commitments expected to come in by February. The move comes as Arini's main hedge fund has been sliding, including an estimated 5.6% drop in September that pushed its year-to-date loss to 13.5% across five consecutive down months. An Arini spokesperson declined to comment.
Why investors still showed up
Raising a big pot of money while posting losses hints at continued demand for marquee credit managers at a moment when many large funds are not opening the doors to new cash. For context, credit hedge funds tracked by Bloomberg were up an average of 3.9% through August, highlighting how Arini's recent run has lagged peers. And it is not the only case of investors backing familiar names after setbacks: Diego Megia's macro fund attracted $1.75 billion earlier this year following a loss in March.
When a credit fund reopens, it usually means the manager sees opportunity ahead. Market Briefs covers private credit free every weekday.
Portfolio positioning and market backdrop
Credit markets have been choppy. Spreads have stretched most at the weaker end, squeezing companies that need to refinance. The gap between the riskier and riskiest tiers of junk-rated debt hit a record in September, per Bloomberg data, as investors increasingly distinguish between healthier, better-rated high-yield issuers that can tap markets and CCC-rated borrowers seen as more exposed to default risk.
Against that backdrop, Arini says it largely steered clear of trades tied to First Brands and to software names, booked gains on Altice France, and took mark-to-market hits elsewhere. Its positions include debt collector Lowell, which reached a restructuring deal in August that would hand control to creditors led by Arini, and Altice International, where bonds have slid further in recent months as maturities draw near. The flagship credit strategy, known for concentrated views that can produce big swings, reported $7.6 billion in assets under management as August ended, and it has remained shut to new inflows since 2024.
The playbook and the manager
In a recent investor letter, Lemssouguer drew a parallel to the first half of 2024, noting the fund was down about 8% over two months before leaning into volatility and finishing the year up 20.8%. "It is the same playbook we are running today and mark-to-market volatility is embedded in how this strategy generates returns," he wrote. Lemssouguer, 36, is among Europe's closely watched credit traders.
He built his reputation at Credit Suisse with high-conviction positions in high yield credit and credit default swaps, where, according to Bloomberg News, he posted a gross annualized return of 38 percent; his yearly performance included 81% for 2019 and 44% for 2020. Arini, named for the parrots he breeds, has expanded from $1 billion at launch in 2022 to a $21.7 billion credit trading specialist. For your money, the takeaway is simple: a prominent credit manager is putting sizable new funds to work just as stress in lower-rated debt is peaking, which can amplify both the risks and the potential payoffs in this corner of the market.
Where the big credit money goes tends to lead the cycle. Join Market Briefs free and track the flows.
