Saturday, 18 April 2015
Last updated 16 hours ago
Jul 3 2012 | 10:44am ET
One hedge fund betting on Greek bonds is expecting a big return in the short run.
While other hedge funds are making long-term plays on Greece, Adelante Asset Management is interested in the short term. And, over that short-term, it expects to turn a 35% profit on its investment, boosted by a debt restructuring agreement.
London-based Adelante bought a basket of Greek debt for about 12..5 cents on the dollar, prior to this month's elections. That poll produced a conservative government that has pledged to renegotiate Greece's tough bailout terms, and that will be good for Adelante, CEO Julian Adams said.
"We think they will cut a deal in the short term," he told Reuters. "It's a tactical position. As the bonds appreciate, we'll take profits."
And Adams expects the bonds to appreciate to about 16 cents or 17 cents, making Adelante a roughly 35% return. Adelante invested about 2% of its assets in the Greek debt basket, which is already worth about 14 cents on the dollar.
"Fourteen cents is way below recovery value in any emerging market debt scenario," Adams said.
"After the Argentinian debt default, bonds initially traded at 30 cents, though they drifted," he said. "Once they were restructured, the recovery rate was 45 cents on the dollar. Ecuador did a buyback at 35 cents on the dollar."
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…