Magnetar's $50M CoreWeave bet swelled to $12.5B-dominating its portfolio
Magnetar Financial, once known for shorting subprime debt in 2008, is now one of the biggest winners of the AI compute boom. A $50 million investment in CoreWeave Inc. (NASDAQ: CRWV) has grown into a $12.5 billion stake-about 72% of Magnetar's $20.5 billion portfolio. The position helped the fund post a 145% gain in a single quarter.
CoreWeave started as an Ethereum miner stockpiling Nvidia GPUs. Those same GPUs now serve high-demand data centers training large AI models.
How the position was built
Magnetar first entered through structured loans. In 2024, Magnetar and Blackstone led a $7.5 billion loan to CoreWeave-one of the largest private debt deals to date.
When CoreWeave went public in March 2025, Magnetar's convertible notes flipped into equity. By September 30, the fund held 91.4 million shares-roughly 23% of the company-even after selling about 4.4 million shares. That partial sale alone booked a 247% profit. The stock is up more than 220% year-to-date.
CRWV quote on Nasdaq | How convertibles work
Why this move matters
Magnetar is known for credit arbitrage and relative value, not single-name equity concentration. This looks closer to venture-style risk than a typical hedge fund allocation-but the upside has been massive. As noted elsewhere, timing still ruled the outcome.
- Loan-to-own path: Senior loans and convertibles created downside protection with equity optionality.
- Infrastructure choke point: GPU capacity is scarce, and CoreWeave sits where demand is surging.
- Concentration risk: 72% in one issuer magnifies idiosyncratic, regulatory, supply chain, and liquidity risks.
- Exit discipline: Trimming into strength realized gains while keeping core exposure.
- Mandate drift risk: Big equity bets can clash with a fund's stated strategy and LP expectations.
Practical checklist for analyzing similar setups
- Instrument stack: Seniority, convert terms, strike, caps, covenants, warrants.
- Downside math: Recovery values, collateral, cash runway, and waterfall outcomes.
- Conversion dynamics: Dilution, lockups, IPO timing, and liquidity windows.
- Customer and margin durability: Contract length, pricing, churn, and hyperscaler exposure.
- Capex and supply: GPU procurement, data center build cycles, vendor concentration, and unit economics.
- Risk hedges: Pairs, factor exposure, vol overlays, and stop-loss/exit triggers.
- Governance and mandate: Position limits, LP communication, and compliance with stated strategy.
Diversification still matters
Big wins can hide fragility. Experts still favor diversified allocation across equities, fixed income, real estate, precious metals, and tax-advantaged retirement accounts to smooth drawdowns and protect compounding.
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