Saba Capital Management's Boaz Weinstein recently exited a now famous and profitable credit derivative bet against JPMorgan, according to sources familiar with the trade. In May, JPMorgan reported a $2 billion trading loss in its chief investment office, due to large bets on an obscure group of indexes that track the performance of corporate bonds, including the Markit CDX NA IG Series 9 index. Weinstein's Saba, among other funds, bet against that trade. Saba, which has liquidated its position in its entirety, "exited directly to JPMorgan's CIO office," according to a source familiar with the hedge fund. Weinstein, a former Deutsche Bank trader, was one of the early proponents of a trade that involved buying Investment Grade Series 9 10-Year Index CDS, discussing it at the Harbor Investment Conference in February. Ironically, the conference was held at JP Morgan's Madison' Avenue offices. [Reuters]
Boaz Weinstein Kills it in May . . .
May was the worst month for hedge funds since October 2008. The HFRX Global Hedge Fund Index lost 2.6 percent. Don’t tell that to Boaz Weinstein. Yeah, he might have lost $1 billion at Deutsche Bank, but that’s old news. Boaz’s Saba Capital (Hebrew for grandfather) bucked the trend in May, up 1.6 percent for the month and 5.8 percent for the year.