Tuesday, 30 August 2016
Last updated 11 hours ago
Aug 29 2014 | 8:20am ET
Elliott Management founder Paul Singer is a better hedge-fund manager than he is a person, according to Hayman Capital Management’s Kyle Bass.
In an interview with the Buenos Aires Herald, Bass—whose hedge fund holds restructured Argentine debt—criticized Singer for “holding poor countries as hostages.”
“I frequently say that if you are an investor, ‘vulture funds’ such as Elliott will be a prudent fiduciary with your money,” he told the newspaper. “They do a good job on that. But there’s a difference between being a good fiduciary and a good global citizen. Singer is holding poor countries as hostages and I would never engage in that. But there are firms out there that don’t have my same morals.”
Argentina missed a US$539 million coupon payment on bonds such as Hayman’s last month, after a U.S. judge blocked it from doing so without also paying Elliott and other hedge-fund holdouts from its last default, in 2001. Hayman’s bonds were issued as part of debt exchanges in 2005 and 2010, in which investors accepted about 30 cents on the dollar.
Bass said he still holds out hope for a deal after the rights against future offers clause—guaranteeing exchange bondholders equal treatment—expires at the end of the year. “The holdouts are going to be commercial in their engagement but they are willing to negotiate,” he said.
“I do hope that a settlement is achieved and that could happen when the RUFO clause expires or get waived,” he said. “The vultures are going to make more money and that’s not good but it might be the necessary evil to liberate Argentines into a better life.”
While Bass agrees with Argentina that the country hasn’t actually defaulted—it deposited the coupon payment with the Bank of New York Mellon, which Hayman and other hedge funds are suing in London for their shares—he did reject Argentine claims that U.S. District Judge Thomas Griesa has been unfair to the country. While Bass aid that Griesa’s rulings are “wrong,” he defend the judge as “impartial.”
“I don’t think he wants to pass judgment on either side. It’s true that the holdouts could have been more diplomatic but also the Argentine government could have been less belligerent. I don’t want to point fingers here.”
Any more fingers, that is.