A series of failed credit bets at Arini, the London-based hedge fund firm founded by former Credit Suisse trader Hamza Lemssouguer, has left its flagship Arini Credit Master Fund nursing a 6.6% loss in March, its second biggest monthly loss, according to a report by Bloomberg.

The report cites an investor letter seen by Bloomberg as confirming that the loss has wiped almost all of the gains made by the fund so far this year, with the $2.6bn strategy up just 0.5% for Q1 2024.

The letter said: “The performance was primarily driven by significant moves in three very large capital structures (-30% to -70% move in some cases) where Arini built positions into the weakness.

“These were unrealised mark-to-market losses, and we used this volatility to increase our higher conviction positions. We expect catalysts in the portfolio to materialise over the next few quarters, and more specifically, in 9-12 months for these recent large movers.”

The losses follow gains of 32.4% last year and 5.7% in 2022, while the flagship fund has recorded monthly gains as high as 17.1%, with its biggest ever monthly loss standing at 10.8%.