(Bloomberg) — Former Credit Suisse star trader Hamza Lemssouguer’s hedge fund Arini achieved another double-digit annual return, helping to boost assets at the three-year-old firm to almost $7 billion.
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The Arini Credit Master Fund gained 21.2%, according to an investor letter seen by Bloomberg. A co-investment money pool returned 13.8%, while the Arini Structured Credit Equity Fund made 4.3%, the letter showed. Credit hedge funds tracked by Bloomberg rose 8.5% on average.
Gains across Arini’s funds last year were driven by the high-yield and leveraged loan markets through both long and short bets, refinancings and liability management transactions, par and deeply discounted bonds, among others.
In his 11-page annual letter to clients, Lemssouguer called tighter spreads in credit markets “irrational” with the maturity wall in European leveraged finance presenting a fertile hunting ground for his London-based firm to make money. Arini, which launched in 2022 with $1 billion, raised a further $1.2 billion last year and Lemssouguer said he plans to expand product offerings.
“We don’t view current spreads as reflective of the risk associated with the underlying credit quality,” Lemssouguer wrote. “Generic credit markets are exposed to disorderly rates market selloffs and budget deficit confidence scares, and these risks have our attention across all regions and jurisdictions.”
After a dismal few years, Europe’s leveraged finance market rebounded strongly in 2024, as falling inflation and the start of the interest rate cutting cycle lured corporate borrowers back. Issuance boomed in both the high-yield bond and leveraged loan markets. Both delivered strong returns — of 8.2% and 9.2% respectively — according to data compiled by Bloomberg.
While many hedge fund clients are migrating to bigger multistrategy firms in hope of steadier returns, outfits run by indidividuals such as Lemssouguer’s Arini and John Aylward’s Sona Asset Management have tapped into demand for specialist credit managers to become the fastest-growing hedge funds in London.
Arini spun out of Squarepoint Capital, one of its original investors, to become a fully independent asset manager last year, the letter said.
A representative for Arini declined to comment.
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Lemssouguer, 34, made a name for himself at Credit Suisse with stellar returns from high conviction bets on high-yield debt and credit default swaps.
Arini — named after the parrots Lemssouguer breeds — entered into 2025 with its credit strategy investing about 55% of its assets in performing credit, 30% in stressed and special situations opportunities and the rest in corporate structured credit.
The firm started building out a collateralized loan obligation business in Europe in 2023 and printed four CLO deals last year. Arini is planning to expand into direct lending to complement its capital solutions business. It expects to announce a deals origination partnership with a pan-European financial institution this year, the letter added.
During his time at Credit Suisse, Moroccan-born Lemssouguer generated a gross annualized return of 38%, including 81% in 2019 and 44% in 2020, according to a previous Arini fund document.
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