Arini Capital Management, one of Europe’s fastest-growing credit hedge funds, is facing a difficult year after several concentrated positions in distressed companies moved sharply against its flagship strategy.
The London-based manager, which oversees about $22 billion, has seen its master fund fall more than 8% since the beginning of 2026. The fund lost almost 8% in July and a further 1% in August, according to people familiar with its performance.
The losses represent a significant reversal for Arini, which was founded in 2021 by former Credit Suisse high-yield trader Hamza Lemssouguer. The firm's investment strategy relies on taking large, often leveraged positions in distressed and high-yield corporate debt. Arini has frequently sought to become one of the largest creditors of companies experiencing financial stress, giving it significant influence during restructurings.
That strategy had produced strong results in recent years. The flagship fund returned 27% in 2023, 21% in 2024 and 10% last year, generating an overall return of roughly 73% during its first four years.
This year, however, positions in Altice International and Aston Martin have become major sources of losses. Altice bonds came under pressure after valuable assets were moved outside the collateral available to creditors. Arini was among senior bondholders involved in negotiations and later supported a proposal seeking preferential treatment in a potential restructuring.
Arini was also hurt by Aston Martin, after the heavily indebted automaker transferred valuable naming and branding rights beyond the reach of existing creditors owed more than £1.3 billion. The move pushed the company's bonds sharply lower. Arini is one of its largest bondholders.
Despite the flagship fund's losses, other Arini strategies have performed better. Its credit opportunities fund is up about 12% this year, while its direct lending strategy has gained approximately 7%.
The latest drawdown also tests Arini's ability to recover from periods of volatility. The flagship strategy previously lost about 8% over two months in early 2024 before gaining roughly 29% over the following year.