Independent Verdict
Obsidian Relative Value Strategy Fund, Ltd. has one of the stronger institutional verification trails in this research series because its identity can be confirmed through several independent regulatory and investor-level sources rather than through Form D alone. The Cayman Islands fund first filed Form D in September 2018 with $26 million reported sold. Additional reported securities sales of approximately $3.15 million in 2019, $60.41 million in 2020 and $9.35 million in 2021 brought cumulative reported sales to approximately $98.91 million. Subsequent amendments in 2022, 2023, 2024 and 2025 did not report additional incremental sales, while a new Form D/A was filed again on September 17, 2026. The strongest manager-level evidence comes from BlackRock Financial Management, Inc.'s latest Form ADV, which identifies Obsidian Relative Value Strategy Fund as one of its reported private funds. Independent regulatory sources in Singapore and Sweden also list BlackRock Financial Management as the fund manager. Even more useful, public SEC filings from Morgan Stanley alternative-investment funds show actual investments in Obsidian and classify the strategy under "Fixed Income Arbitrage," with monthly liquidity disclosed in those historical investor reports. This creates a much richer picture than a generic hedge-fund filing: Obsidian appears to be a BlackRock-managed relative-value fixed-income strategy designed for institutional investors, where the central risks are leverage, spread convergence, financing, derivatives, basis risk and liquidity under stress rather than simple long-only market exposure.
SEC Filing & Fundraising History
Obsidian Relative Value Strategy Fund, Ltd. was formed in the Cayman Islands in 2018 and filed its original Form D in September of that year under CIK 0001752928 and SEC File No. 021-321268. The original offering reported $26 million sold. Public Form D tracking shows an additional $3.15 million in 2019, $60.41 million in 2020 and $9.35 million in 2021. That produces cumulative reported securities sales of approximately $98.91 million. The 2022 through 2025 amendments did not report additional incremental sales, and the September 17, 2026 amendment again lists the issuer as a pooled investment fund using Rule 506(b).
The fund's principal Cayman address historically appears at Ugland House, South Church Street, Grand Cayman. The 2026 filing identifies Ian Pilgrim and W. William Woods as directors, both of whom have appeared in earlier fund records. Jennifer Collins, Noelle L'Heureux and Anne Marie Petach also appear among current or historical director records across prior filings.
Form D fundraising trail:
2018 original filing: $26.00M 2019 additional reported sales: $3.15M 2020 additional reported sales: $60.41M 2021 additional reported sales: $9.35M Approximate cumulative total: $98.91M 2022 additional reported sales: $0 2023 additional reported sales: $0 2024 additional reported sales: $0 2025 additional reported sales: $0 Latest Form D/A: September 17, 2026
The flat incremental sales after 2021 should not automatically be interpreted as fund stagnation or poor performance. Form D tracks securities sold, not NAV, redemptions, gains, losses or current assets under management. A mature hedge fund can continue operating without reporting large new subscription amounts.
BlackRock Financial Management Verification
The manager relationship is unusually strong. BlackRock Financial Management, Inc.'s latest available Form ADV identifies Obsidian Relative Value Strategy Fund, Ltd. among its reported private funds. Public Form D aggregation based on the adviser's ADV places cumulative reported securities sales near $98.9 million.
This matters because the BlackRock connection is not inferred from branding. It is supported directly through adviser regulatory records.
A second independent layer comes from Singapore. The Monetary Authority of Singapore's CISNet Restricted Schemes list includes Obsidian Relative Value Strategy Fund, Ltd. and identifies BlackRock Financial Management, Inc. as the fund manager.
A third layer comes from Sweden. Finansinspektionen, Sweden's financial supervisory authority, lists Obsidian Relative Value Strategy Fund as an active foreign alternative investment fund and states that it is managed by BlackRock Financial Management, Inc. The Swedish record indicates authorization for marketing to professional investors.
These independent regulatory records substantially reduce the risk of confusing Obsidian with an unrelated fund using a similar name.
Cayman Regulatory Evidence
The Cayman Islands Monetary Authority has also historically listed Obsidian Relative Value Strategy Fund, Ltd. as a registered mutual fund. A CIMA list as of December 31, 2021 identified registration number 1503902 and a registration date of August 31, 2018.
The fund's LEI record remains active and uses the same Cayman registration identifier. Bloomberg's LEI database lists the fund as a Cayman fund, entity status active, with Cayman Islands Monetary Authority registration authority ID 1503902.
That provides another useful cross-check between:
SEC Form D BlackRock Form ADV MAS Singapore Swedish Finansinspektionen Cayman Islands Monetary Authority LEI records
For a private hedge fund, that is a relatively strong multi-jurisdiction regulatory footprint.
Institutional Investor Evidence: Morgan Stanley Funds Actually Held Obsidian
The most valuable external evidence comes from public SEC filings made by Morgan Stanley alternative-investment funds.
A 2019 schedule of investments for a Morgan Stanley alternative-investment vehicle classified Obsidian Relative Value Strategy Fund under "Fixed Income Arbitrage." The report showed a first acquisition date of September 1, 2018, an original cost of approximately $11 million, fair value of approximately $10.88 million and monthly liquidity.
Another 2019 Morgan Stanley filing showed approximately $15 million invested in Obsidian, with fair value around $14.84 million, again classified as fixed-income arbitrage with monthly liquidity.
By June 2020, Alternative Investment Partners Absolute Return Fund reported an Obsidian position with approximately $13.60 million cost and approximately $16.89 million fair value, representing 5.37% of that fund's net assets. The report again identified monthly liquidity.
A 2021 SEC filing showed approximately $13.60 million cost and approximately $16.97 million fair value for Obsidian, representing 5.70% of the investing fund's NAV, again under Fixed Income Arbitrage and again with monthly liquidity.
These records are extremely valuable because they are not marketing materials prepared by BlackRock. They are portfolio disclosures from separate investment funds that actually allocated capital to Obsidian.
Historical institutional evidence therefore supports three important conclusions:
Obsidian was an investable institutional hedge-fund strategy Outside professional allocators classified it as fixed-income arbitrage Historical investor-level liquidity was monthly
The historical fair values also show that institutional investors experienced periods when the position was both below and above original cost, which is a useful reminder that relative-value strategies are not risk-free.
What "Relative Value" and "Fixed Income Arbitrage" Usually Mean
The fund's legal name uses "Relative Value Strategy," while independent institutional filings classify it as fixed-income arbitrage. These descriptions are consistent.
Fixed-income relative-value strategies generally attempt to profit from pricing differences between related securities rather than simply betting that bond markets will rise.
Potential trades can include:
Treasury basis trades Yield-curve relative value Swap-spread trades Cash bond vs. futures positions Mortgage-backed securities relative value Agency vs. non-agency spreads Credit index vs. cash bond trades Cross-market sovereign relative value Inflation-linked bond relationships Capital-structure arbitrage Interest-rate volatility Repo-financed positions
The exact Obsidian portfolio is not publicly disclosed, so these should be treated as examples of the strategy category rather than confirmed current holdings.
The basic idea is that two economically related instruments become temporarily mispriced. The manager buys the cheaper security and sells or hedges the richer one, hoping the price difference converges.
This can create lower directional exposure than a conventional bond fund, but it can require substantial leverage because the pricing gaps being targeted are often small.
Leverage: Potentially the Central Risk
Relative-value fixed-income strategies frequently use leverage to magnify small pricing discrepancies.
A spread of 20 or 30 basis points may not generate an attractive absolute return without financing. Managers may therefore use repo markets, derivatives, futures, swaps or other borrowing arrangements to increase gross exposure.
The Form D does not publicly disclose Obsidian's current gross leverage, net leverage or financing counterparties.
That missing information is one of the most important diligence gaps.
Investors should request:
Gross asset exposure Net exposure Repo borrowings Derivative notional Value-at-Risk Stress-test losses Haircuts Collateral requirements Financing maturity Counterparty concentration Liquidity coverage
A strategy can appear market-neutral while still carrying very large gross positions.
Basis Risk
Relative-value trades depend on relationships between securities remaining reasonably stable.
Those relationships can break down.
For example, a bond and futures contract may normally trade within a predictable basis. During market stress, forced selling, funding constraints or regulatory changes can cause the basis to widen dramatically rather than converge.
A relative-value manager can therefore be directionally "hedged" yet still suffer large losses if the relationship between the long and short positions behaves unexpectedly.
This is known as basis risk.
Basis risk becomes more dangerous when leverage is high because a relatively small divergence can generate large mark-to-market losses.
Funding & Repo Risk
Fixed-income arbitrage often depends on short-term financing.
A manager may own securities financed through repurchase agreements while holding offsetting derivatives or short positions.
If repo lenders increase haircuts or refuse to roll financing, the fund may be forced to reduce positions even when the underlying investment thesis remains valid.
This is one of the key lessons from historical relative-value crises.
Investors should therefore examine whether financing is diversified across multiple banks and whether maturities are concentrated overnight or extend further.
A highly liquid government bond portfolio can still face severe stress if financing disappears.
Margin & Collateral Risk
Derivatives and leveraged fixed-income trades require collateral.
When market volatility rises, clearinghouses and prime brokers can demand additional margin.
A strategy may therefore face cash demands at exactly the time when underlying trades are moving against it.
This creates a liquidity spiral:
Prices move adversely Variation margin increases Cash is required Positions are reduced Forced selling moves spreads further More margin becomes necessary
The ability to maintain substantial cash and liquid collateral buffers is therefore central to risk management.
BlackRock Scale: Positive Infrastructure, Not a Guarantee
Obsidian's BlackRock management relationship provides obvious institutional advantages.
BlackRock has substantial infrastructure in:
Risk management Trading Collateral operations Repo markets Derivatives Counterparty management Technology Market data Compliance Legal Operations
Its Aladdin platform and global trading relationships can provide capabilities unavailable to smaller hedge funds.
However, BlackRock's scale does not eliminate relative-value risk.
Many famous fixed-income arbitrage losses in financial history occurred at sophisticated institutions with strong teams and advanced models.
The quality of infrastructure can reduce operational risk, but market, leverage and funding risks remain.
Monthly Liquidity Evidence
The Morgan Stanley SEC filings repeatedly report monthly liquidity for Obsidian holdings.
This is useful because hedge-fund liquidity is often difficult to verify publicly.
Historical monthly liquidity suggests that institutional investors could redeem at monthly intervals under the terms applicable to those investments.
However, three caveats matter.
First, those records describe historical terms around 2019–2021.
Second, different share classes may have different liquidity.
Third, monthly redemption frequency does not mean immediate access to cash.
There may still be notice periods, gates, suspension provisions or side-pocket rules.
Investors should confirm current liquidity rather than assuming that historical monthly dealing remains unchanged.
Observed Historical Valuation Experience
Public Morgan Stanley holdings also provide a rare glimpse into how the fund behaved over time.
One 2019 report showed roughly $11 million cost versus $10.88 million fair value, slightly below cost.
Another 2019 report showed $15 million cost versus approximately $14.84 million fair value.
By mid-2020, one institutional investor showed $13.60 million cost versus approximately $16.89 million fair value.
In 2021, a similar cost basis was shown at approximately $16.97 million fair value.
These numbers should not be converted into a fund-wide performance track record because they relate to specific investor positions, acquisition dates, cash flows and reporting periods.
But they do demonstrate something valuable: Obsidian produced real mark-to-market variation and was not simply a cash-like product with fixed value.
Singapore Distribution Evidence
The Monetary Authority of Singapore's CISNet restricted-scheme records list Obsidian among private funds notified for distribution to eligible or professional investors.
BlackRock Financial Management is listed as manager.
This is meaningful because Singapore restricted schemes are not conventional retail-authorized funds.
The structure is consistent with Obsidian being distributed to sophisticated investors rather than the general public.
This fits with the broader Cayman / Regulation D / institutional-investor profile.
Swedish Professional-Investor Marketing Evidence
Sweden's Finansinspektionen independently lists Obsidian Relative Value Strategy Fund as an active foreign AIF.
The regulator identifies BlackRock Financial Management, Inc. as manager and records authorization related to marketing a non-EEA alternative investment fund to professional investors in Sweden.
This supports the same conclusion from another jurisdiction: Obsidian appears positioned primarily as an institutional alternative investment vehicle.
Related BlackRock Hedge-Fund Platform
BlackRock Financial Management's Form ADV identifies many private alternative funds beyond Obsidian, including:
BlackRock Global Market Strategies Fund BlackRock Credit Alpha Offshore Fund BlackRock Systematic Total Alpha Fund BlackRock Appreciation Strategy Fund BlackRock Absolute Macro Fund Event-Driven Fund Global Event Partners Caerus DT Fund Phoenix QLS Fund
The existence of multiple alternative strategies means Obsidian should be analyzed as one sleeve inside a broader BlackRock alternatives platform rather than as a standalone business.
It also creates allocation and conflict questions.
Investors should understand how investment opportunities are allocated when multiple BlackRock funds can trade similar securities or relative-value opportunities.
Large asset managers generally maintain allocation policies, but capacity-constrained trades can still create conflicts that deserve review.
Capacity Risk
Fixed-income relative-value strategies can face capacity limits.
If too much capital pursues the same arbitrage relationship, spreads can compress and expected returns decline.
A strategy can therefore become less attractive as assets grow.
This is relevant because Obsidian appears to have accumulated most of its Form D-reported capital by 2021, with little incremental sales reported afterward.
One possible explanation is that the fund reached a stable or intentionally limited capacity.
Other explanations include redemptions, limited new fundraising or simply lack of additional U.S. subscription activity.
Form D alone cannot identify the reason.
The fundraising plateau should therefore be treated as an observation rather than a negative conclusion.
Interest-Rate Volatility Risk
Relative-value strategies are often designed to hedge broad rate direction, but interest-rate volatility can still matter greatly.
Sharp changes in Treasury yields can create dislocations in:
Futures basis Swap spreads Mortgage convexity Yield curves Repo financing Volatility markets
A sudden volatility spike can cause relationships that normally move together to separate rapidly.
The March 2020 Treasury-market dislocation is a useful historical example of how even highly liquid government securities can experience severe basis stress.
Investors should therefore ask specifically how Obsidian behaved during March 2020 and other major volatility episodes.
The public Morgan Stanley filings showing positive fair value by June 2020 are interesting, but they are not sufficient to reconstruct the fund's peak drawdown during the crisis.
Counterparty Risk
A leveraged arbitrage fund can have exposure to multiple banks through repo, swaps, futures clearing and securities borrowing.
Counterparty failure can create losses even when the underlying trade is correct.
Diversification of counterparties is therefore important.
Investors should request the percentage of gross exposure or collateral associated with the largest prime broker or bank.
They should also understand whether derivatives are centrally cleared or bilateral.
Central clearing can reduce bilateral credit risk but introduces clearinghouse margin requirements and concentration.
Operational & Valuation Risk
Many fixed-income instruments have less transparent pricing than listed equities.
Complex derivatives, structured securities and less-liquid bonds may require model-based valuation.
BlackRock has substantial pricing and risk infrastructure, but investors should still review:
Independent pricing sources Valuation committees Model validation Price challenge process Broker quotes Level 2 vs. Level 3 assets Auditor review
Relative-value strategies can also contain positions where each side is individually large even though the net market risk is small.
Accurate gross exposure and valuation reporting therefore matters greatly.
Reputation & Public Evidence
Obsidian itself receives relatively little mainstream media coverage.
That is not unusual for an institutional relative-value hedge fund.
The stronger public evidence comes from:
SEC Form D BlackRock Form ADV Cayman registration Singapore MAS records Swedish regulatory records Morgan Stanley fund disclosures LEI records
This is arguably more valuable than press coverage because it establishes real institutional usage and regulatory continuity.
There is little meaningful retail-review data, and consumer review websites would be inappropriate evidence for evaluating this type of institutional product.
No material fund-specific enforcement action against Obsidian Relative Value Strategy Fund was identified in the reviewed public sources.
That statement is limited to the reviewed evidence and does not mean no litigation, dispute or regulatory issue has ever occurred.
What We Think & Key Risks
Obsidian has a stronger public verification trail than many private hedge funds because several completely independent sources point to the same conclusion.
BlackRock Financial Management's ADV identifies the fund.
MAS identifies BlackRock as manager.
Sweden's financial regulator identifies BlackRock as manager.
Cayman records show the legal fund.
Morgan Stanley investment funds actually reported holding Obsidian and independently classified it as fixed-income arbitrage.
This level of cross-verification makes sponsor identity relatively straightforward.
The main weakness is current strategy transparency.
Public materials do not disclose:
Current gross leverage Current net leverage Current largest trades Current repo exposure Prime brokers Current derivatives counterparties Duration VaR Stress-test losses Current NAV Current investor count Current redemption notice Current management fee Current performance fee
These are precisely the variables that matter most in a leveraged relative-value fund.
The biggest economic risk is likely leverage interacting with basis and funding risk.
A trade can be fundamentally correct over six months but still fail if margin calls force liquidation after six days.
That distinction is central to understanding fixed-income arbitrage.
The second major risk is liquidity mismatch. Monthly investor liquidity can create pressure if underlying positions become difficult to unwind during stressed markets.
The third is model risk. Relative-value relationships are often statistically calibrated from historical markets, but structural changes in regulation, dealer balance sheets or clearing can change those relationships.
The fourth is counterparty concentration.
The fifth is capacity. As more capital enters a relative-value opportunity, expected spread capture can decline.
Investors should therefore focus on historical drawdowns, leverage discipline, financing diversification and liquidity stress rather than being reassured only by BlackRock's brand.
Final Assessment
Obsidian Relative Value Strategy Fund, Ltd. has a very strong regulatory and institutional identity trail. The Cayman fund first filed Form D in 2018 and has reported approximately $98.91 million in cumulative securities sales through the subsequent filing sequence. BlackRock Financial Management, Inc. identifies the fund in its Form ADV, while regulators in Singapore and Sweden separately identify BlackRock as the manager.
The most valuable external evidence comes from Morgan Stanley alternative-investment fund filings, which show actual institutional investments in Obsidian, classify the strategy as Fixed Income Arbitrage and historically report monthly liquidity. These holdings also demonstrate that Obsidian's fair value moved both below and above acquisition cost over time, confirming that the strategy carries genuine market risk despite its relative-value orientation.
The key unresolved questions are leverage, repo financing, derivatives, basis risk, counterparty concentration and current liquidity terms. Those variables matter much more than the fund's name or cumulative Form D amount.
Form D confirms an exempt securities offering. BlackRock's adviser registration confirms manager identity. Neither means the SEC, MAS, Swedish authorities or Cayman regulators approved the fund's investment strategy or guaranteed returns.
Investment Manager: BlackRock Financial Management, Inc.
BlackRock Manager Verification: Form ADV: Confirmed Singapore MAS Restricted Scheme: Confirmed Swedish Finansinspektionen: Confirmed Cayman Mutual Fund Registration: Confirmed LEI Record: Active
Cayman Registration Authority: Cayman Islands Monetary Authority
Cayman Registration ID: 1503902
CIMA Historical Registration Date: August 31, 2018
LEI: 549300U4U387ES3S6791
Strategy Classification from Independent Institutional Investor Filings: Fixed Income Arbitrage
Historical Liquidity Reported by Institutional Investors: Monthly
Independent Institutional Investor Evidence: Morgan Stanley alternative-investment funds held Obsidian
Examples of Historical Institutional Positions:
2019 Example: Cost: approximately $11.00M Fair Value: approximately $10.88M Strategy Classification: Fixed Income Arbitrage Liquidity: Monthly
2019 Additional Example: Cost: approximately $15.00M Fair Value: approximately $14.84M Liquidity: Monthly
June 2020 Example: Cost: approximately $13.60M Fair Value: approximately $16.89M Share of Investor Fund NAV: approximately 5.37% Liquidity: Monthly
2021 Example: Cost: approximately $13.60M Fair Value: approximately $16.97M Share of Investor Fund NAV: approximately 5.70% Liquidity: Monthly
Important: These are historical holdings of outside investment funds and are not equivalent to Obsidian's total NAV or official performance record.
Likely Strategy Family: Fixed-income relative value Fixed-income arbitrage Potential rate / spread / basis strategies Potential derivatives and financing use
Potential Strategy Tools: Cash bonds Futures Swaps Repo Short positions Securities financing Relative-value hedges
Exact Current Holdings Publicly Disclosed: No
Current Gross Leverage Publicly Disclosed: No
Current Net Leverage Publicly Disclosed: No
Current Prime Brokers Publicly Disclosed: Not identified in reviewed public materials
Current Auditor Publicly Disclosed: Not confirmed in reviewed sources
Current Redemption Terms Publicly Disclosed: Not fully confirmed Historical institutional records indicate monthly liquidity
Singapore Distribution Status: Restricted Scheme / professional or eligible investor context
Swedish Regulatory Status: Foreign AIF permitted for marketing to professional investors
Manager Platform: BlackRock Financial Management private alternative-fund platform
Related BlackRock Private Funds Identified in Adviser Records: BlackRock Global Market Strategies Fund BlackRock Credit Alpha Offshore Fund BlackRock Systematic Total Alpha Fund BlackRock Appreciation Strategy Fund BlackRock Absolute Macro Fund Event-Driven Fund Global Event Partners Caerus DT Fund Phoenix QLS Fund
Media Penetration: Limited for exact fund name
Institutional Document Penetration: Very Strong
Retail Review Relevance: Very Low
Material Fund-Specific Enforcement Identified in Reviewed Sources: None identified
Primary Due-Diligence Focus: Gross leverage Net leverage Repo financing Funding maturities Basis risk Interest-rate volatility Derivative notional Counterparty concentration Collateral requirements Margin calls Liquidity stress Redemption notice Gates Historical drawdowns VaR Stress testing Valuation controls Capacity limits Management fee Performance fee Auditor Current service-provider roster
Independent Conclusion: Obsidian Relative Value Strategy Fund has a strong BlackRock manager connection and unusually useful independent institutional evidence. Morgan Stanley fund filings confirm that professional investors historically treated Obsidian as a fixed-income arbitrage strategy with monthly liquidity. The main risk is not identity uncertainty but the interaction of leverage, financing, basis risk and liquidity during stressed fixed-income markets.