Boaz Weinstein Said to Raise $160 Million for Saba Hedge Fund

Date: Monday, June 1, 2009
Author: Saijel Kishan and Jacqueline Simmons, Bloomberg

Boaz Weinstein, the bond trader who lost more than $1 billion last year at Deutsche Bank AG, has raised about $160 million since the end of April for his new hedge fund, according to two people familiar with the matter.

Saba Capital Management LP, based in New York, plans to start trading in August, said a third person with knowledge of the firm. The people asked not to be identified because the information is private.

Saba, Hebrew for grandfather, was the name of the credit unit Weinstein started at Frankfurt-based Deutsche Bank in 2001. Weinstein, 35, lost money in 2008 after betting on bonds of companies such as Ford Motor Co. and hedging some of those wagers with credit-default swaps, contracts to protect against or speculate on default, people familiar with the matter said in January when the plans to start his own fund were made public.

“One bad year of performance, especially when that year was 2008, shouldn’t preclude people from raising money, so long as they have a good pedigree and sound long-term track record,” said Peter Greene, a partner in New York at law firm Lowenstein Sandler PC, whose clients include hedge funds.

Weinstein’s unit, which managed about $10 billion, lost about 18 percent in 2008, his only losing year out of 11 at Deutsche Bank, according to the person with knowledge of his firm. The group earned between $600 million and $700 million in 2007, people familiar with the matter said in January.

Jonathan Gasthalter, a spokesman for Weinstein, declined to comment on the fundraising.

Deutsche Bank Hires

Weinstein’s firm has hired 15 people who worked on the Saba desk at Deutsche Bank, including former managing directors Paul Andiorio, 39, Jeremy Benkiewicz, 34, and George Pan, 44, according to marketing documents obtained by Bloomberg News. Andiorio had worked at Goldman Sachs Group Inc. before Deutsche Bank, while Benkiewicz was at Societe Generale SA and Pan at JPMorgan Chase & Co.

Saba Capital’s chief risk officer, Ken Weiller, was chief operating officer at New York-based hedge fund Claren Road Asset Management LLC, the documents show.

Weinstein was promoted last year to co-head of global credit trading with Colin Fan. Before Deutsche Bank, he worked at Donaldson, Lufkin & Jenrette and started his career at Merrill Lynch & Co. in 1995, according to the marketing materials. Weinstein graduated that year with a Bachelors degree in philosophy from the University of Michigan.

Hedge funds are private, lightly regulated pools of capital whose managers can buy or sell any assets, bet on falling and rising asset prices, and participate in profits from money invested.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net;