- Wealth PMS (50L+)
It’s seems some big hedge funds have set up positions in Greece recently that might become stressed (HT ValueWalk.com):
John Paulson’s firm acquired a 5.4% stake in Alpha Bank, the fourth largest lender in Greece and a 9.9% stake in EYDAP SA, the largest water supply and sewage company in the country with approximately 4.3 million customers.
Alpha Bank disclosed the investment of Paulson &Co., but did not provide further details about it. Based on Thomson Reuters Eikon data, the 5.4% stake in Alpha Bank has a market value of €407 million or $565 million on Tuesday at the Athens Stock Exchange.
And he’s not alone:
Some of the largest hedge fund managers betting on Greek banks include, Daniel Loeb’s Third Point LLC and Seth Klarman’s Baupost Group, Farallon Capital, York Capital Management, QVT Financial, and Dromeus.
Also our friend Prem Watsa is part of this crowd:
Prem Watsa, chairman of Fairfax Financial Holdings Ltd (TSE:FFH) (OTCMKTS:FRFHF) invested in JUMBO SA (OTCMKTS:JUMSF), MYTILINEOS HLDGS SA (OTCMKTS:MYTHF), and Eurobank Properties. Watsa previously stated, “we continue supporting Greece and believe that the country has made great progress in dealing with its serious economic issues.”
Great progress is right. Just probably not what they expected.
Time will tell if these investments have been fantastic, or if Greece recovers but their investments don’t. The recovery of Greece is a given; but not all companies will. And there’s the dreaded fear of nationalization or denial of private investment; the leftist Greek government has already revoked Eldorado (a Canadian Miner) licence on a mining project.