Saba Capital, the firm controlled by Boaz Weinstein, is preparing to launch a new investment vehicle aimed at increasing its exposure to both public and private business development companies, sources familiar with the matter said.
The planned vehicle will target BDCs, a type of closed-end fund that typically invests in small- to mid-sized private companies, including those in distressed situations. The firm’s intention to broaden its BDC investment activity follows recent transactional moves that Saba completed in the public markets.
According to the sources, Saba recently executed tender offers tied to Starwood Real Estate Trust and to Blue Owl Capital (Blue Owl II). Across those transactions, the firm acquired $10 million in aggregate face value, spread across 190 separate trades. The sources indicated that substantially all of those purchases were in the Starwood REIT.
Those purchases and the planned new vehicle appear to be connected to demand emanating from wealth advisors. The sources said advisors whose clients are constrained in private BDCs and in interval funds - vehicles that typically limit liquidity - have been seeking ways to generate liquidity for their clients. That advisor-driven demand is cited as a motivating factor behind Weinstein’s decision to raise the new vehicle.
The new vehicle is intended to expand Saba’s activity in this segment of the market rather than to replace prior investments. The firm’s recent tender offer activity and the pattern of trades described by the sources are presented as part of a broader effort to provide capital solutions and to reposition exposures in BDCs and related closed-end funds.
Context and mechanics
- The targeted investment types are public and private BDCs - closed-end funds that invest in small- and mid-sized private companies, including distressed businesses.
- Recent tender offer activity involved Starwood Real Estate Trust and Blue Owl Capital (Blue Owl II), with $10 million acquired across 190 trades.
- Sources reported that the bulk of those purchases were from Starwood REIT holdings.
Market signals
Sources attribute the fund-raising decision in part to sustained demand among wealth advisors seeking liquidity for clients holding private BDC positions and interval funds. Those advisors' requests for exit options or secondary liquidity are described as influencing Saba’s move to assemble a new vehicle focused on these assets.