A business development company (BDC) is a publicly traded investment firm that lends to and takes ownership stakes in small- and mid-sized private companies that often can’t get traditional bank loans. Like a neighborhood lending pool or venture backer you can buy shares in, a BDC can offer higher dividend income but also carries greater credit and economic risk, so investors focus on the quality of its loans, portfolio companies and payout sustainability.
interval fundsfinancial
Interval funds are pooled investment vehicles that hold a mix of assets, often including less-easily-sold investments, and allow investors to sell shares back to the fund only during set short windows (for example quarterly). Think of them like a club that opens its exit door occasionally: they offer access to investments that can boost returns or income but come with limited liquidity, so they matter to investors who can tolerate being locked in for longer periods.
closed-end fundsfinancial
A closed-end fund is an investment pool that raises a fixed amount of money by issuing a set number of shares, which then trade on an exchange like stocks. Unlike bank-style mutual funds that buy or sell shares on demand, its market price can sit above or below the fund’s per-share value of holdings (like a used-car market price versus the sticker price), so investors should watch both the traded price and the underlying asset value for potential bargains or risks.
navfinancial
Net asset value (NAV) is the total value of all the investments and assets in a fund or company, minus any debts or liabilities, divided by the number of shares or units outstanding. It represents the per-share worth, giving investors an idea of what each share is truly worth based on the underlying assets. Think of it like a company's total worth divided among its shares, helping investors assess whether a share is fairly priced.
tender offersfinancial
A tender offer is a proposal by one company or individual to buy shares from existing owners of a company at a specified price within a certain time frame. It matters to investors because it can lead to changes in company ownership or control, potentially affecting the value of their investments. Essentially, it’s a way for someone to try to purchase a large portion of a company’s stock directly from shareholders.
reitfinancial
A real estate investment trust (REIT) is a company that owns, operates, or finances income-producing real estate, like shopping centers, apartments, or office buildings. For investors, REITs offer a way to invest in real estate without having to buy property directly, often providing regular income through dividends. They function like a mutual fund for real estate, making it easier for people to add property investments to their portfolio.
registered investment adviserfinancial
A registered investment adviser (RIA) is a firm or individual legally registered with regulators to give personalized investment advice and manage clients' money, with a duty to put clients’ interests ahead of their own. Think of an RIA as a licensed financial guide who must disclose fees, conflicts and how they are paid; that transparency and legal duty matter to investors because it reduces the risk of hidden costs or biased recommendations.
credit riskfinancial
Credit risk is the chance that a borrower or debt issuer will fail to make agreed interest or principal payments, leaving lenders or bondholders with reduced or lost money. For investors it matters because higher credit risk usually means higher expected returns to compensate for that danger, greater chance of losses or sudden drops in market value, and more scrutiny of ratings and cash-flow strength—like lending a friend money and weighing the odds they'll pay you back.
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Firm Launches Initiative to Provide Liquidity Across Public and Private Credit Retail Products
Deploys Capital Into New NAV Dislocation Strategy
NEW YORK--(BUSINESS WIRE)--
Saba Capital Management, L.P. (together with certain of its affiliates, “Saba” or “we”), one of the world’s leading closed-end fund activists and investors, today announced a significant expansion of its investment activities into both public and private BDCs and interval funds – products that share the structural DNA of closed-end funds but have historically offered retail investors little to no secondary market liquidity in their private forms.
A Natural Extension of Saba’s Core Expertise
Saba has built its reputation over more than a decade navigating closed-end fund discounts in public markets. The firm now believes the same dynamics – NAV marks that diverge materially from the prices at which investors can actually exit – are present at scale across both public and private BDCs and interval funds, representing hundreds of billions of dollars of retail capital.
Over the past several months, Saba has made the following investments in this emerging opportunity set:
$40 million in FS KKR Capital Corp. (NYSE: FSK), a publicly traded BDC, representing Saba’s first meaningful foray into the BDC market.
$75 million in Bluerock Private Real Estate Fund (NYSE: BPRE), formerly an interval fund that converted to a publicly traded closed-end fund. BPRE opened at an approximately 40% discount to NAV upon conversion, and Saba was able to acquire its position at discounts ranging from 30-40% – an illustration of the gap between marks and market reality.
Equity stakes in Apollo Global Management, Ares Management Corporation and Blackstone Inc., the three leading managers in the private credit and alternative asset management space, reflecting Saba’s conviction that the best franchises in this industry will benefit from the secular growth of private credit – even as near-term dislocations create opportunity.
Tender Activity: Modest Results, Large Impact
Saba recently completed tender offers for shares of Starwood Real Estate Income Trust (“SREIT”) and Blue Owl Capital Corporation II (“OBDC II”), acquiring approximately $10 million in aggregate face value across 190 separate trades, substantially all from SREIT. The breadth of participation across those trades underscores the genuine and widespread demand for liquidity among retail investors in these products. While the aggregate volume was below initial expectations, Saba views the results as a meaningful validation of its thesis.
Following Saba’s public activity in SREIT, Starwood Capital Group and its Chairman and CEO, Barry Sternlicht, announced a commitment to inject additional equity capital into the fund to accelerate investor redemptions. Saba commends Mr. Sternlicht for this decisive action on behalf of SREIT investors. We believe our entry into this market was a catalyst for that outcome, and that all SREIT investors have benefited as a result.
With respect to OBDC II, at only $332 million in remaining fund size, the pool of illiquid capital available to tender was naturally limited. As markets evolve and redemption pressures build, particularly given the credit risk we see accumulating into 2027 and 2028, we believe the opportunity set for providing liquidity at scale will grow considerably.
Generating Momentum: RIA Interest and Expanding Pipeline
Saba’s public entry into this space has generated substantial interest from the registered investment adviser community. The firm has received dozens of inbound calls from RIAs whose clients hold positions in private BDCs and interval funds and are seeking liquidity options. Saba is considering providing bids on a number of additional products, including the Cliffwater interval fund and Blue Owl’s OCIC – one of the largest private BDCs in the market.
Saba’s goal is straightforward: retail investors in these products deserve access to liquidity, just as investors in public BDCs have long enjoyed. We intend to be a consistent, credible bid in this market.
Expanding Into a New Strategy: NAV Dislocation Across Public and Private Credit
Saba’s activities in this space have generated meaningful interest from investors, and the firm is actively deploying capital into a new strategy focused on NAV dislocations across the full spectrum of listed and unlisted vehicles: public BDCs, closed-end funds, investment trusts, REITs, private BDCs and interval funds.
The strategy targets entry points at discounts of 30-40% or greater to NAV, a threshold Saba has already achieved across its investments to date, including its $75 million position in BPRE acquired at a 30-40% discount and its tender activities in SREIT. These early results demonstrate that the opportunity is not theoretical – it is already being captured.
Saba believes the question is not whether this space will experience significant stress, but when. Hundreds of billions of dollars of private credit are currently held by retail investors in products that offer limited or no secondary liquidity. Saba intends to be a consistent source of that liquidity – and to have the capital deployed and ready when the need intensifies.
About Saba Capital Management
Saba Capital Management, L.P. is a global alternative asset management firm that seeks to deliver superior risk-adjusted returns for a diverse group of clients. Founded in 2009 by Boaz Weinstein, Saba is a pioneer of credit relative value strategies and capital structure arbitrage. Saba has offices in New York City and London. Learn more at www.sabacapital.com.
