Key Takeaways
- • Arini Capital Management's flagship credit hedge fund is reported down more than 26% year-to-date, according to the Financial Times, with margin calls from its leveraged-finance banks driving asset sales.
- • Forced sales reported to total more than $2 billion in face value over the past week, following roughly $800 million of debt disposals that The Wall Street Journal reported on October 30.
- • The flagship manages about $7 billion of the London firm's roughly $22 billion in assets.
- • Arini holds about $2 billion of debt issued by Brightspeed, a broadband operator backed by Apollo that is reported to be weighing a Chapter 11 filing, making its most distressed positions the hardest to exit.
- • The firm raised $1.5 billion of new commitments for the strategy in October and remains open to additional capital; its CLO funds and European direct lending fund have not been reported as part of the strain.
Summary
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-based manager into asset sales reported to top $2 billion in face value over the past week, according to the Financial Times. The flagship runs about $7 billion of the firm's roughly $22 billion in assets.
The current sales follow roughly $800 million of debt disposals in prior weeks, which The Wall Street Journal reported on October 30, when the fund was down more than 20% for the year as of mid-October. Since then, Arini has 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 most distressed positions are the hardest to exit. Arini holds about $2 billion of debt issued by Brightspeed, the Apollo-backed broadband operator that is reported to be weighing a Chapter 11 filing. The firm has also 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 strategy had delivered strong results in prior years, with the flagship gaining about 27% in 2023, 21% in 2024 and 10% in 2025. In October, the firm raised $1.5 billion of new commitments for the strategy, including $425 million deployed at the start of the month, and it 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 pattern is a familiar one for levered credit books: margin calls are met by selling the most liquid holdings first, leaving a more concentrated and less tradable portfolio behind. For allocators, the key questions are how much of the remaining book can be sold without moving prices, and how financing terms with prime brokers change if marks continue to fall.
The current sales follow roughly $800 million of debt disposals in prior weeks, which The Wall Street Journal reported on October 30, when the fund was down more than 20% for the year as of mid-October. Since then, Arini has 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 most distressed positions are the hardest to exit. Arini holds about $2 billion of debt issued by Brightspeed, the Apollo-backed broadband operator that is reported to be weighing a Chapter 11 filing. The firm has also 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 strategy had delivered strong results in prior years, with the flagship gaining about 27% in 2023, 21% in 2024 and 10% in 2025. In October, the firm raised $1.5 billion of new commitments for the strategy, including $425 million deployed at the start of the month, and it 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 pattern is a familiar one for levered credit books: margin calls are met by selling the most liquid holdings first, leaving a more concentrated and less tradable portfolio behind. For allocators, the key questions are how much of the remaining book can be sold without moving prices, and how financing terms with prime brokers change if marks continue to fall.
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