Former Credit Suisse star trader Hamza Lemssouguer’s hedge fund, Arini, has delivered another impressive double-digit return, propelling the firm’s assets to nearly $7bn after just three years of operation, according to a report by Bloomberg.
As stated in an investor letter, the Arini Credit Master Fund delivered a 21.2% return, the co-investment fund posted a 13.8% return, and the Arini Structured Credit Equity Fund gained 4.3%. In comparison, credit hedge funds tracked by Bloomberg averaged an 8.5% increase.
Arini’s funds saw strong performance last year due to strategies involving the high-yield and leveraged loan markets, including both long and short positions, refinancings, liability management transactions, and investments in par and discounted bonds.
In recent months, the fund identified opportunities in sectors such as telecoms, travel and leisure, and specialty financials, while maintaining short positions in autos, chemicals, broadcasting, and satellites.
In his 11-page annual letter to clients, Lemssouguer described tighter spreads in credit markets as “irrational,” noting that the European leveraged finance market’s maturity wall offered a promising opportunity for his London-based firm. Arini, which started with $1bn in 2022, raised an additional $1.2bn last year, and Lemssouguer indicated plans to expand the firm’s product offerings.
“We don’t view current spreads as reflective of the risk associated with the underlying credit quality,” Lemssouguer wrote. “Generic credit markets are exposed to disorderly rates market selloffs and budget deficit confidence scares, and these risks have our attention across all regions and jurisdictions.”
Europe’s leveraged finance market experienced a strong recovery in 2024, driven by lower inflation and the beginning of interest rate cuts, attracting corporate borrowers. Both high-yield bonds and leveraged loans generated strong returns, with gains of 8.2% and 9.2%, respectively, according to Bloomberg data.
Despite many hedge fund clients shifting toward larger multistrategy firms for more stable returns, niche credit-focused hedge funds like Arini and John Aylward’s Sona Asset Management have become some of London’s fastest-growing firms.
Arini spun off from Squarepoint Capital, one of its original investors, to become a fully independent asset manager last year, as noted in the letter.
Lemssouguer, 34, earned a stellar reputation at Credit Suisse, where he achieved remarkable returns through high-conviction bets on high-yield debt and credit default swaps.
Entering 2025, Arini’s credit strategy allocates around 55% of its assets to performing credit, 30% to stressed and special situations, and the remainder to corporate structured credit.
Looking ahead, Arini sees opportunities to deploy capital in European junk-rated issuers facing imminent debt maturities, especially through “pull-to-par” trades, shorts, or private funding solutions.
The firm is also exploring non-sponsored direct lending, asset-backed financing, and real estate deals, as banks are expected to retreat from these higher-risk areas. Arini believes private credit can penetrate the European market more than the US, where banks still dominate corporate lending.
In 2023, Arini began building a collateralised loan obligation (CLO) business in Europe, completing four CLO deals last year. The firm plans to expand into direct lending and expects to announce a partnership with a pan-European financial institution for deal origination later this year.
During his tenure at Credit Suisse, Lemssouguer generated a gross annualised return of 38%, including 81% in 2019 and 44% in 2020, according to a previous Arini fund document.
