Knossos' bold Venezuela bet
As Venezuela grapples with low oil prices, economic obligations and political chaos, one hedge fund has bet with the government—until now
Few trades in Latin America have been as lucrative, or as
gut-wrenching, as investing in Venezuelan bonds. Francisco
Ghersi knows first hand.
Ghersi, co-founder of the Knossos Asset Management hedge
fund, has ridden the volatile price swings in
Venezuela’s bonds, frequently cashing in on some
of the highest yields in dollar-denominated emerging market
"It is without a doubt a wild ride," Ghersi says.
"Uncertainty is a constant in Venezuela. You feel like
you’re constantly playing with fire."
Fears among investors that Venezuela could default on its
debts have routinely turned the weeks leading up to each of its
bond payments into tension-filled, rumor-stoked periods for
bondholders. "It’s the never-ending question: Will
they pay or not?" Ghersi says
Investors sighed with relief in April when Petróleos
de Venezuela, Venezuela’s state-owned oil company
known as PDVSA, made $2.2 billion in bond payments. For
investors who scooped up...
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