Saba Capital’s 2023 woes continue. Two of its funds are down more than 10% this year.

• The two biggest funds at Boaz Weinstein’s Saba Capital are down by more than 10% this year.
• According to HSBC’s weekly report, the flagship fund has lost close to 12%.
• Weinstein came into 2023 bearish about the economy, which has been resilient despite rising rates.

Saba Capital, Boaz Weinstein’s $4.8 billion hedge fund manager, hasn’t had the best year.

According to the most recent issue of HSBC’s Hedge Weekly, two of its funds — the flagship and a more hedged version — are down 11.9% and 10.6%, respectively, through November 10.

The company’s spokesperson declined to comment.

The New York-based manager, which bets on credit markets in its flagship fund, which is designed to outperform during market volatility, has continued its decline this year as the global economy has performed better than expected. Weinstein told the Financial Times a year ago that a “soft landing” — in which the Federal Reserve rapidly raises interest rates to control inflation while avoiding an economic recession — was unlikely, and that he was holding credit-default swaps on companies he expected to default.

Instead, global economies, particularly the United States, have outperformed expectations and continue to grow despite higher borrowing costs. The S&P 500 is up nearly 18% year to date, thanks to big-name tech companies cutting spending and focusing on the bottom line.

According to Hedge Fund Research, the average hedge fund has underperformed the market, returning 3.3% through the end of October.

Saba’s closed-end funds strategy — a unique activist play that has been a thorn in the sides of asset management behemoths like BlackRock and Franklin Templeton — is up 11.5% this year, according to a source close to the fund.

Weinstein’s main funds have performed well during periods of market turmoil, which is something that many institutions look for when selecting a hedge fund manager. The firm’s flagship returned more than 73% in 2020 and rode last year’s market volatility to a 22% gain in 2022. In 2021, the fund lost 0.9%.

In the meantime, the ultra-hedged Tail Hedge strategy returned 63%, -6%, and 15% in 2020, 2021, and 2022, respectively.

Weinstein made headlines earlier this year when he, Pershing Square founder Bill Ackman, and Avenue Capital founder Marc Lasry made an offer to buy Sculptor Capital, formerly known as Och-Ziff.

The board of Sculptor accepted a lower bid from Rithm Capital, in part because the trio of hedge fund founders had “not demonstrated adequate committed funding.” The Financial Times reported this week that shareholders are set to accept Rithm’s $720 million offer after the company settled a lawsuit with disgruntled investors earlier this week.