Investors Worry Greeks May Slam Creditors
Efforts by hedge funds to profit from Greece’s debt restructuring may not be taking legislators’ willingness to foist losses onto them into account, Bloomberg writes. As the Institute of International Finance’s negotiations with private creditors continue to drag, hedge funds, pensions and sovereign wealth funds are hamstrung as to what to do with roughly 60 billion euro in combined Greek debt exposure. Moreover, if creditors balk at lower interest rates for new debt issues, credit-default swaps could be struck against debt holders. Funds such as New York’s Gramercy Advisors have thus far steered far away from Greek debt. “It’s not clear to us that out of this process you can make any money,” Partner Robert Rauch said.
Zombie Bank Turns Profit For Hedge Funds
Looking for some real return? Try Lehman Brothers. The Telegraph reports hedge funds Elliot Associates, Car Val, King Street and Baupost snagged traunches of the bank’s debt at rock-bottom prices and now stand to make billions from the continued fallout. Surprisingly, the firms may have helped debt holders a bit. Claims in 2008 and 2009 had been trading at 20p on the pound, according to PwC – administrators for Lehman Brothers International Europe. These days it’s trading at between 78p and 80p.
Atwater Capital Goes Bye-Bye
Lee Pollack and Kris Green have closed New York-based hedge fund Atwater Capital’s doors, Financial News today reports. The duo’s decision, they said, was in response to the difficulties of raising capital in the current market. Pollack and Green left Atticus Capital in 2009 and used seed money from their former boss, Timothy Barakett, to start their own firm. The firm ran $163.6 million at the end of last year.