By Lawrence Delevingne

NEW YORK (Reuters) – Boaz Weinstein’s main Saba Capital Management LP hedge fund reported a 33% gain in March through Friday amid coronavirus-led market turmoil, bringing its year to date gain to 67%, according to a note sent to clients seen by Reuters.

Saba’s Tail Fund, which promises doomsday market insurance through bets that perform when markets spiral, did even better: a 99% rise in March and a 175% gain for the year through Friday, the letter said.

Weinstein, best known for finding relative value between credit investments, wrote in the letter that he did not expect such market volatility would come in the form of a virus but was certain that “investors needed to be ready for an extreme market decline.”

New York-based Saba, launched out of Deutsche Bank (DE:) in 2009, manages approximately $2.2 billion. Representatives for the firm did not immediately respond to an email seeking comment Sunday night.

Weinstein wrote in the note that he was struck by how far banks have stepped back from taking risk.

He said that last week many high-yield bond trading desks were largely unwilling to bid for the risk their clients needed to sell, in order to exit junk bonds and high-yield credit default swaps.

“In dozens of examples, banks asked if Saba would make a price so the banks could act as agent instead of principal,” Weinstein wrote. “This new trading reality is part of why we had our most profitable week in the firm’s 11-year history and our most profitable year to date.”

Weinstein said that Saba was finding “extraordinary” new investments for its core strategies, including so-called tail hedging, or using credit default swaps to profit from severe market dislocations.

“We believe a recession will produce a significant default rate affecting the (high yield) companies we are short far more than the (investment grade) companies we are long,” he wrote.

Weinstein added that he will limit inflows into his three funds to an aggregate of $1 billion in subscriptions and then stop taking in new cash for the remainder of 2020.