Finisterre Up 3.17% In 2012, Finding Value In Abu Dhabi’s Debt

Published on

Finisterre Capital specializes in emerging market investments, which encompass a wide range of asset classes. The portfolio managers at the hedge fund have impressive resumes; Xavier Corin-Mick was an executive at Morgan Stanley (NYSE:MS), Boaz Yaari is a Brevan Howard alum, and Paul Crean has worked at UBS AG  (NYSE:UBS).

Finisterre Sovereign Debt Fund invests in emerging market debt and forex, in both long and short positions. The hedge fund was up 0.87 percent in November, returned 1.65 percent through Q4, and up 3.17 percent year to date. Finisterre’s best year was its +50 percent performance generated in 2009. The hedge fund has achieved an annualized return of 9.86 percent since inception in 2003.

The Sovereign Debt Fund has the largest exposure in sovereign debt of The Czech Republic, Russia, Poland (all Eastern or central European Countries) as well as Abu Dhabi and South Africa. The hedge fund’s assets are above $780 million, while the total firm assets  are over $1.55 billion.

The hedge fund managers comment on the volatile economic scenario that prevailed in the month of November and how the focus has shifted from The EU crisis to the fiscal cliff. They also mention the huge amount of debt issued by small emerging economies like Mongolia, Zambia and Bolivia. Emerging economies have issued a record $85 billion in debt in this year, Mongolia sold $1.5 billion in debt in last weeks of November at yields close to 5 percent. These relatively high rates are not understandable when examples of politically ‘challenged’  countries like Argentina, which is at the brink of defaulting, are still in play.


Leave a Comment