Arini Capital Management Losses Deepen to 32 Percent
Arini Capital Management reduced leverage and trimmed positions after its main hedge fund suffered a 32 percent year-to-date loss through October 2026.
The main hedge fund of Arini Capital Management saw year-to-date losses deepen to 32 percent as of the end of October 2026, including a 19.7 percent decline in October alone. The London-based high-yield debt specialist attributed the downturn to a high correlation within its portfolio and an underestimation of the dislocation in CCC-rated debt.
In response to the volatility, the firm reduced gross leverage to its lowest level since early 2022 and trimmed several positions. The fund re-underwrote its five largest holdings, which represent approximately two-thirds of its net asset value. Arini has also sold some liquid assets to prospective buyers, including Pacific Investment Management Co. and Oaktree Capital Management.
Despite the losses, the firm maintains conviction in its core investment theses, arguing that technical factors and targeted shorting drove the decline rather than fundamental data. Arini continues a 1.5 billion dollar capital raise and reported 389 million dollars in inflows during the final week of October.
