Lee Robinson, president of Altana Credit Opportunities Fund, said that the chances of relief from US sanctions on Venezuela have increased. He indicated to the Bloomberg agency that this leads to a restructuring of the debt bonds of the Republic and PDVSA
A hedge fund manager who accurately timed the U.S. housing market crash and cryptocurrency rally eight years ago thinks he has found his next long-overlooked investment: Venezuelan debt.
The bonds that the country stopped paying almost five years ago they are trading around record lows at 2 cents on the dollar. Adding to the risks, the Nicolás Maduro administration is under sanctions that prohibit US investors from buying the securities.
Still, Lee Robinson said the recent compromise between Washington and Venezuelan President Nicolás Maduro signals an eventual easing of sanctions, which would open the door for the country to restructure the 60,000 million dollars, plus interest, it owes to bondholders. Since launching a fund dedicated to Venezuelan debt in 2020, his London-based company, Altana Wealth, has been racking up notes and recently doubled its investment to close to $40 million.
“Ultimately, this is a binary event. It doesn’t really matter if you’re buying this at 7, 8, 9 or 10. At the end of the day, you’re going to get multiples of that in pretty much any scenario where sanctions are lifted,” he told the agency. Bloomberg.
Meanwhile, the US and Venezuela carried out a rare prisoner swap in October, with Secretary of State Antony Blinken signaling that the US government would be willing to reconsider some sanctions if Maduro takes “constructive steps” to restore democracy. In March, President Joe Biden sent a high-level delegation to visit Maduro when oil prices spiked at the start of the war in Ukraine. Since then, both nations have been in talks.
Robinson, who previously worked for Paul Tudor Jones, predicted the housing market in 2008 and launched a digital currency fund in 2014 before the bitcoin boom. Altana, which launched in 2011, manages around $500 million in assets.
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He predicts the US could ease some sanctions after the midterm elections in November, when Democrats see the political stakes of making such a decision lower. Since you are based outside the US, your fund is not subject to the sanctions, that restrict American people from buying debt.
“If you had asked me this time last year, I would have said, ‘maybe something will happen before 2024 because of the election, but I can’t say for sure,'” he said. “Things have changed. Things have accelerated.”
Robinson is not alone in predicting this. Medley Advisors analyst Pilar Navarro forecasts relief before the end of the first quarter of 2023.
Robinson’s Altana Credit Opportunities Fund, based in the Cayman Islands, rose 27% in August this year, according to a bulletin sent to investors and seen by Bloomberg. That compares with average losses of more than 20% on an index of Bloomberg of developing world bonds. If he is right about Venezuela, he said, it will result in a significant payout.
“It’s a fantastic opportunity,” he said. “You may never want to invest in Venezuela, but if you want to, you should do it soon because anything could happen after November 8,” he stressed to the news agency.
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