News > Hedge Funds

Boaz Weinstein is on the warpath

By NexChange
Hedge Funds

In the latest twist on the Saba Capital vs. Public Sector Pension Investment Board (PSP) saga, Saba’s Boaz Weinstein essentially told Forbes that he’d rather slash his wrists than give PSP a single cent:
“PSP recklessly and maliciously attacked me and my firm. Read our motion to dismiss – it shows that we did absolutely nothing wrong and that is why we will not settle this suit for 1 cent.”
The man has a point though. Taking a quick gander at PSP’s complaint, it seems that the Canadian pension may be making something out of nothing here:
“to calculate the NAV of the Class A shares of the Fund in satisfaction of the pending requests to redeem those shares as of March 31, 2015, defendants deviated from their past practice by using for the first time a different method for valuing the MNI bonds in the Master Fund's portfolio, namely, they used a bids-wanted-in-competition ("BWIC") process that purportedly produced materially depressed bids reflecting a significant liquidity/blockage discount from the values previously assigned by defendants to the Master Fund's holdings of MNI Bonds.”
Given that a) PSP’s supposedly one of Saba’s largest clients (and thus a large chunk of capital) and that b) Saba’s would be selling a big block of bonds into a depressed market, doesn’t this method sound – at least – a rational thing to do?

Also, there’s this little nugget from Saba’s motion to dismiss which, if true, might prove to be more than just a pebble in the shoe for PSP:
“the valuation process PSP describes in its complaint is entirely consistent with the governing documents—indeed, they required it under the circumstances. The Investment Manager was not obligated to continue using a valuation methodology under conditions in which it did not generate reasonable, reliable and accurate valuations for the bonds at issue. Saba turned to a methodology that did achieve such valuations. In any event, PSP cannot sue the Fund itself for breach of contract, because the governing documents demonstrate that the Fund plays no role whatsoever in the determination of the NAV.”
This thing could go a long way though, so stay tuned.
Photo: Andy Maguire

Subscribe to our Newsletter

Be one of the first to experience the future of financial services