Boaz Weinstein

Boaz Weinstein (born 1973) is an American hedge fund manager and founder of Saba Capital Management.

Deutsche Bank was interested in expanding its operations in the CDS market having just acquired Bankers Trust, the firm that created credit default Swaps in the early 1990s.

During his first year at Deutsche Bank, Weinstein netted significant gains for the German bank during the chaos created by Russia defaulting on its loans and the collapse of Long-Term Capital Management, a hedge fund that was heavily leveraged.

He attended the University of Michigan and graduated in 1995 with a degree in philosophy.

During one summer, he worked at Goldman Sachs and was mentored by David Delucia, a partner at the firm.

After graduating from college, Weinstein worked for Merrill Lynch at the firm's debt trading desk.

In 1997, he joined Donaldson, Lufkin & Jenrette, to which he was recruited by his early mentor Delucia who had transferred from Goldman Sachs.

Weinstein began trading floating rate notes – bonds with variable interest rates – just as the credit derivatives market was gaining popularity on Wall Street, significantly changing how the finance industry operated.

Weinstein joined Deutsche Bank in January 1998, following several traders who moved over to the firm.

He became the only person at the bank trading credit default Swaps (CDS), insurance policies that payout when borrowers default.

He was promoted to vice president of Deutsche Bank in 1999.

When Weinstein had begun working at Deutsche Bank, J.P. Morgan was the only other major bank trading in CDS and only a few trades a day occurred in the market.

By a decade later, CDS trading had expanded into a multi-trillion-dollar market involving numerous major banks.

Weinstein became one of the most successful traders in the derivatives market.

He rose to prominence at Deutsche Bank in the early and mid 2000s with his credit default swap and capital structure arbitrage trading strategies.

He then formed a proprietary trading group within Deutsche Bank.

His CDS trading flourished during the most volatile periods, including the 2000–01 California electricity crisis, 2001 Enron scandal, and 2002 WorldCom scandal.

Weinstein took the opposite position when AOL Time Warner's stock dropped around the same period.

Correctly wagering that the company would not default on its loans, he purchased bonds from the company while hedging his position by shorting the stock.

Known as capital structure arbitrage, this is one of Weinstein's main strategies to take advantage of discrepancies in the prices of the several types of securities available for trade on the same company.

In 2001, at the age of 27, Weinstein was promoted to become one of the youngest managing directors in Deutsche Bank's history.

By this point, he was managing an internal hedge fund within Deutsche Bank with about $30 billion in positions, and also managing the flow trading desk.

He made a similar trade in 2005 with General Motors by selling protection on the company's debt using a CDS and at the same time hedging his position by shorting the company's shares.

The GM trade for a period appeared to go wrong when the company's stock unexpectedly rose while the CDS plummeted, indicating a loss on both sides.

The positions rebounded the following year netting Deutsche Bank a profit on the trade.

His proprietary trading group, which he named Saba in 2007, gained around $900 million in 2006 and $600 million in 2007.

Saba reportedly lost as much as $1.8 billion in 2008, Weinstein's only losing year out of his eleven years at Deutsche Bank.

After leaving the bank in 2009, Weinstein started Saba Capital Management as a separate hedge fund.

As of September 2022, Saba manages $4.8 billion in assets.

Weinstein was among the first to identify and publicize a trading opportunity that was later nicknamed the "London Whale", when a trader at JPMorgan made a number of trades that exposed the firm to about $6.2 billion in losses.

The trades in turn netted several hedge funds including Weinstein's hundreds of millions of dollars after they took an opposing position in the credit default swap market.

Weinstein is the son of Giselle and Stanford Weinstein and grew up in a Jewish family on the Upper West Side.

His father owned an insurance brokerage and his mother, who had immigrated from Israel, was a translator.

He has an older sister, Ilana.

Weinstein first enrolled in a chess workshop at the age of five.

At the age of sixteen, he was ranked as a Life Master by the United States Chess Federation and was third in the US for his age group.

Weinstein had an interest in investing from an early age and was a fan of the television program Wall Street Week, hosted by Louis Rukeyser, which his family watched every Friday night.

As a junior at the Stuyvesant High School in New York City, he was a winner of a stock-picking contest sponsored by Newsday, beating out a field of about 5000 students.

At 15 years old, he began working as an intern at Merrill Lynch, after school and during the summer.

By January 2009, it had regained about $600 million.