Arini is facing mounting pressure from lenders and rival traders as losses at its flagship hedge fund exceed 26% this year, forcing the credit manager to raise fresh capital and sell billions of dollars in debt holdings, according to a report by the Financial Times.

The $22bn investment firm, founded by former Credit Suisse trader Hamza Lemssouguer, has been hit by a sharp selloff in distressed corporate debt, with concentrated positions in heavily indebted companies amplifying losses. Its flagship fund, which manages approximately $7bn, has faced margin calls from banks providing leverage, prompting asset sales reportedly exceeding $2bn in face value over the past week.

Arini has reduced positions in several corporate borrowers, including Merlin Entertainments, Claritev and Sabre, alongside more complex credit default swap exposures. Some rival hedge funds have reportedly established short positions against Arini's largest holdings, adding further pressure to securities already affected by deteriorating credit conditions.

The firm's substantial exposure to distressed borrowers presents additional challenges. Arini holds approximately $2bn in debt issued by Apollo-backed telecoms operator Brightspeed, which is reportedly considering a potential Chapter 11 bankruptcy filing. The fund has also held sizeable positions in Altice International, Aston Martin and The Very Group, where restructuring negotiations and restrictions on trading could complicate efforts to reduce exposure.

Arini has previously generated strong returns through concentrated credit investments, with its flagship strategy gaining approximately 27% in 2023, 21% in 2024 and 10% in 2025. However, the same approach has left the fund vulnerable to illiquidity and forced selling during the current downturn.

Despite the losses, Arini secured $1.5bn in new investor commitments in October, including $425m deployed at the beginning of the month, and remains open to further fundraising. The firm maintains relationships with major Middle Eastern sovereign wealth funds, which could provide additional capital as it navigates the credit market dislocation.

The developments highlight the risks associated with leveraged, concentrated distressed debt strategies, particularly when deteriorating market liquidity and restructuring uncertainty force hedge funds to unwind positions at depressed valuations.