By Svea Herbst-Bayliss
NEW YORK, April 27 (Reuters) - Boaz Weinstein's Saba Capital plans to expand its investment activities in public and private business development companies, a type of closed-end fund that invests in small to mid-sized private companies in distressed businesses, with a new investment vehicle, sources familiar with the plans told Reuters.
The news comes after Saba recently completed tender offers for Starwood Real Estate Trust and Blue Owl Capital (Blue Owl II), acquiring $10 million
in aggregate face value across 190 separate trades, the sources said. Substantially all came from the Starwood REIT, the sources added.
The sources said demand among wealth advisors whose clients are stuck in private BDCs and interval funds and want liquidity helped fuel Weinstein's decision to raise the new vehicle.
Saba alongside Cox Capital Partners offered to buy up to 6.9% shares in Blue Owl Corporation II at a roughly 35% discount to net asset value.
Weinstein, a prominent investor who won a bet against a JPMorgan Chase trader known as the London Whale has argued that private credit is facing significant stress and that investors are looking for a way to exit.
Sources close to Saba acknowledge that the aggregate volume of tenders was below initial expectations but that Saba still views the results as a meaningful validation of its thesis.
(Reporting by Svea Herbst-Bayliss; Editing by Chris Reese and Chizu Nomiyama )
