Saba Capital Expands Tender-Offer Playbook to Nontraded BDCs, Interval Funds

Saba Capital Management LP said it is formally expanding its investment mandate to target public and private business development companies and interval funds. The firm, founded by Boaz Weinstein in 2009, said it would apply its expertise in closed-end fund discounts to address what it described as a significant liquidity gap for retail investors.

Saba Capital said that retail capital in BDCs and interval funds is often hampered by valuations that diverge materially from actual exit prices. By applying its credit relative value and capital structure arbitrage strategies, the firm said it intends to capture value where these discrepancies exist.

Previously reported by AltsWire, Weinstein said in a television interview aired March 23, 2026, that he believes private credit vehicles face the conditions for a large-scale investor exit and characterized the sector as a potential “London Whale-type trade,” a reference to the 2012 JPMorgan derivatives loss from which Saba Capital profited.

Recent investment activity highlights the firm’s strategic focus:

• Public BDC entry: Saba Capital deployed $40 million into FS KKR Capital Corp. (NYSE: FSK), its first investment in the BDC market.
• Real estate opportunities: The firm invested $75 million in the Bluerock Private Real Estate Fund (NYSE: BPRE). Saba Capital acquired its position at a 30% to 40% discount to net asset value following BPRE’s conversion to a publicly traded closed-end fund.
• Industry benchmarking: The company has taken equity stakes in major private credit franchises, including Apollo Global Management, Ares Management Corporation, and Blackstone Inc., citing the long-term secular growth of private credit as a primary driver for these positions.

Saba Capital recently completed tender offers for shares of Starwood Real Estate Income Trust, a nontraded real estate investment trust, and Blue Owl Capital Corporation II, or OBDC II, a nontraded BDC, acquiring approximately $10 million in aggregate face value across 190 separate trades.

While the firm noted that aggregate volume fell below initial projections, it characterized the participation as a “meaningful validation” of its thesis regarding retail investor demand for liquidity in these products. Following Saba’s move into SREIT, Starwood Capital Group and its chairman and chief executive officer, Barry Sternlicht, announced a commitment to inject additional capital into the trust.

With respect to OBDC II, Saba Capital said the pool of illiquid capital available to tender was naturally limited. As markets evolve and redemption pressures build, particularly given the credit risk accumulating into 2027 and 2028, Saba Capital said the opportunity set for providing liquidity at scale will grow considerably.

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