Boaz Weinstein

Boaz Ronald Weinstein
Born	1973 Manhattan, New York City, U.S.
Occupation(s)	Hedge fund executive, investor
Known for	Founder of Saba Capital Management

Boaz Ronald Weinstein (born 1973) is an American hedge fund executive and the founder of Saba Capital Management. He rose to prominence during the 2000s at Deutsche Bank, where he specialized in credit default swap and capital structure arbitrage strategies, eventually heading a proprietary trading division. After departing in 2009, he established Saba Capital, which managed assets totaling $4.8 billion as of September 2022.

Weinstein was among the earliest to recognize the investment opportunity arising from JPMorgan’s "London Whale" episode, which resulted in approximately $6.2 billion in losses for the bank. His contrarian stance in the credit default swap arena generated hundreds of millions in gains for his hedge fund.

Early life and education

Raised in a Jewish household on Manhattan’s Upper West Side, Weinstein’s father operated an insurance brokerage, while his mother, an immigrant from Israel, worked as a translator. He has one older sibling, a sister named Ilana.

Demonstrating exceptional talent early on, Weinstein achieved chess Life Master status at sixteen and ranked third nationally within his age category. His fascination with investing began during adolescence, influenced by Wall Street Week and winning a stock-picking competition as a junior at Stuyvesant High School competing against 5,000 entrants. At age 15, he completed internships at Merrill Lynch during both school terms and summer breaks.

He earned a philosophy degree from the University of Michigan in 1995. Throughout his college summers, he gained experience at Goldman Sachs, where partner David Delucia served as his mentor.

Career

Following graduation, Weinstein joined Merrill Lynch’s debt trading desk. In 1997, he transitioned to Donaldson, Lufkin & Jenrette, recruited by Delucia from Goldman Sachs. There, he began trading floating rate notes as the credit derivative market expanded on Wall Street, revolutionizing financial markets.

Deutsche Bank

In January 1998, Weinstein became part of Deutsche Bank alongside several other traders. He was appointed as the bank’s exclusive trader of credit default swaps (CDS), which are contracts that pay off when borrowers default. Deutsche Bank sought to expand its CDS operations after acquiring Bankers Trust, the pioneer of CDS in the early 1990s.

During his initial year, Weinstein delivered substantial profits amid the 1998 Russian debt default and the downfall of the highly leveraged hedge fund Long-Term Capital Management. He earned a promotion to vice president in 1999. At that time, only J.P. Morgan actively traded CDS; within ten years, this market ballooned into a multi-trillion-dollar sector involving numerous major financial institutions.

Weinstein emerged as a top derivatives trader by capitalizing on turbulent events such as the 2000–01 California electricity crisis, the Enron scandal in 2001, and WorldCom’s collapse in 2002. He utilized capital structure arbitrage—a strategy exploiting valuation gaps between different securities of the same company—such as purchasing bonds while shorting shares during AOL Time Warner’s stock decline. In 2005, he executed a comparable trade with General Motors by selling CDS protection and shorting GM stock simultaneously. Although initially facing losses due to an unexpected rise in GM’s share price, these positions ultimately recovered and generated profits for Deutsche Bank.

At just 27 years old in 2001, Weinstein became one of Deutsche Bank’s youngest managing directors. He managed an internal hedge fund controlling roughly $30 billion in positions and supervised the flow trading desk. His proprietary trading team, branded Saba in 2007, produced around $900 million in earnings in 2006 and $600 million in 2007. Nevertheless, Saba reportedly incurred losses up to $1.8 billion during 2008—marking Weinstein’s only losing year at Deutsche Bank—before recouping approximately $600 million by January 2009.

Saba Capital Management

Weinstein launched Saba Capital Management, a hedge fund specializing in credit, in April 2009. The firm is headquartered in Manhattan's Chrysler Building and initially brought on board 15 members from his previous team. Deutsche Bank, his former employer, had consented to this transition years prior and became one of Saba's primary brokers. The name Saba, meaning "grandfather" in Hebrew, pays tribute to Weinstein's grandfather, a survivor of the Warsaw Ghetto.

At its inception, Saba managed between $140 million and $160 million in capital. By November 2010, the fund had attracted $1.8 billion and posted a 10% return that year. In March 2011, Absolute Return + Alpha recognized it as the fastest expanding hedge fund of 2010. Weinstein was also featured on Fortune's 40 Under 40 lists for both 2010 and 2011.

Weinstein leveraged the 2012 JPMorgan Chase trading loss to his advantage. The trader Bruno Iksil was offloading billions of notes linked to the Investment Grade Series 9 10-year Index CDS. Observing that the price index was undervalued in November 2011, Weinstein started purchasing CDSs without knowing JPMorgan was the counterparty selling them. By February 2012, he encouraged hedge funds to maintain their buying positions amid ongoing sales. JPMorgan eventually incurred a $6.2 billion loss. Estimates suggest Weinstein generated $200–300 million in profits for Saba clients, increasing assets under management to $5.6 billion.

Philanthropy

In 2010, Weinstein founded the Tali and Boaz Weinstein Foundation with a mission centered on education, poverty relief, Jewish community initiatives, and aiding disadvantaged children in New York City. He contributed to renovations at Stuyvesant High School, his alma mater, in 2012.

During May 2020, the Weinsteins donated $2 million to twelve nonprofits combating domestic violence amid the COVID-19 crisis. Beneficiaries included Sakhi for South Asian Women, American-Jew Family Support Center, Womankind, and Violence Intervention Program.

Personal life

An adept poker and blackjack player, Weinstein developed card counting skills in the early 1990s inspired by Edward O. Thorp’s Beat the Dealer. He participated with a covert MIT blackjack team depicted in Bringing Down the House and is believed to be banned from numerous casinos as a known card counter. In 2005, Warren Buffett invited him to a celebrity poker event where Weinstein won a Maserati.

He married Tali Farhadian in Manhattan in 2010; the couple has three daughters. In 2012, Weinstein acquired a Manhattan residence on Fifth Avenue valued at $25.5 million from Huguette Clark’s estate.