The Arini Credit Master Fund jumped 23.4% through the end of October benefiting from bets against European manufacturers facing US and China headwinds, Reuters reports, citing an unnamed source and a September investor letter.
Managed by former Credit Suisse bond trader Hamza Lemssouguer, the $3.7bn fund, which focuses on European markets, made short bets on electric vehicle and satellite companies, anticipating growing pressure on these sectors amid rising protectionist measures in the US and China’s ability to mass-produce at low costs.
The September letter reports that following Elon Musk's Starlink winning contracts with United Airlines and Air France, European satellite industry bonds traded saw significant declines in September, with some falling as much as 10%. The letter also noted that with waning European consumer demand, fading government stimulus, falling used electric vehicle prices and high labour costs, there will be further demands on the industry, furthered by Europe having to pay for commodities that are primarily priced in US dollars.
According to hedge fund research firm PivotalPath, cited by Reuters, Arini's year-to-date performance has outpaced recent industry averages, with hedge funds focused on corporate debt returning 9% and those in distressed assets up 11.5% over the same period.
The fund, which manages a total of $6.7bn, has not yet released its October update. Spokespeople declined to comment.
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