A company is not always going to have an up and up year. While it is desirable to see gains over the previous year, for larger corporations and businesses, there are going to be years where profits drop. This proved to be the case for Boaz Weinsten’s Saba Capital Management in 2014. In fact, it was actually the worst year in the history of the company, as it posted an 11 percent decline, which is the third straight year the company has finished below what it had done the previous year.
The firm dropped all across the board, as the capital management company’s major fund saw a decline of 1.2 percent in the month of December alone. 10 out of 12 months in 2014 saw a decline in profits from the previous year, which is not a favorable sign.
The company is managed by Boaz Weinstein, who also co-founded and sat at the head of the Deutsch Bank AG’s credit department. Since the middle of 2012, the company has been struggling. In fact, the central bank actually pushed down the interest rate of the company and pressed it volatility, which cuts down on the possible investment options between securities. This did have somewhat of a play in the reason why the company saw its value decline over the past year. However, beyond this, the hedge fund of Saba Capital Management declined 5.9 percent between October and November. This happened because of the drop in oil prices.
“The environment for Boaz’s strategy has been challenging, but if things get more volatile — and we think they will — he will make a significant amount of money,” said Gregg Hymowitz, managing partner at Entrust Capital Management, which has about $300 million invested with Saba.
Now, the company had proven rather successful in the past. Weinstein ran the internal fund for the Deutsche Bank in Frankfurt until he decided to create the new Saba Capital company in the spring of 2009. The name itself means grandfather in Hebrew, and he decided to use the name in order to show a bit of age and grace in the company, even though it was actually new. When the company first started, it saw impressive gains, including an 11 percent gain in 2010 and then a 9.3 percent gain in 2011. This proved most impressive as most hedge funds lost money during this time of the year. However, the company then started to bleed money in 2012, as it saw a 3.9 percent loss in 2012 and then a 6.8 percent loss in 2013. This continues to grow larger and larger as the company has now lost double figure percentage points this year.