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Brevan Howard To Open Argentina-Focused Fund

Brevan Howard Asset Management, a global alternative asset manager based in Jersey is planning to open an Argentina-focused fund amid increasing speculations that the Latin American country will overcome default.

Alan Howard is the co-founder and manager of Brevan Howard Asset Management, which has $37 billion in assets under management (AUM).

AS first reported by Bloomberg News, the global alternative asset manager raised $25 million for its Brevan Howard Argentina Fund based on its filing with the U.S. Securities and Exchange Commission (SEC).


Brevan Howard part of a group of Argentina bondholders

Brevan Howard Asset Management was part of a group of Argentina bondholders in 2012 when Elliott Management, the hedge fund run by Billionaire Paul Singer requested a U.S. court to block payments to the debt. Singer acquired the original defaulted bonds and filed a lawsuit for full payment. Argentina failed to reach an agreement with the hedge funds, and it is planning to sell bonds governed by local laws.

A federal judge ruled that the country cannot pay its restructured debt without paying the holdout hedge funds first. In November, Singer said he would pursue sanctions against the country for evading the court order.

It had been reported that Argentina and the hedge funds will restart their negotiation in 2015. Many believed that Argentina will be able to resolve the dispute once a bond clause preventing a settlement expires on December 31 and a new president is elected.

Other investors opened Argentina-focused funds

Argentina continues to attract investors despite its debt problems. Aside from Brevan Howard Asset Management, several other hedge funds launched funds focused on Argentina in anticipation of a resolution to the issue.

Some of the hedge funds that launched an Argentina-focused fund include Redwood Capital Management, Gramercy Funds Management, Owl Creek Asset Management and Bienville Capital Management.

In a previous interview with Bloomberg’s Simone Foxman, Cullen Thompson, the chief investment officer of Bienville Capital Management said the firm opened its Argentina Opportunity Fund based on their expectation of a monetary policy change with the upcoming elections in Argentina.

“The next administration will be forced to roll back subsidies, restoring fiscal balance. They will stop monetizing deficits and implement an inflation-targeting regime at the central bank,” said Thompson.  He believed that the new government will be more pragmatic and business friendly.