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rerum cognoscere causas
(Bloomberg) -- Robert Koenigsberger is a fan of Juan Guaido. But that doesn’t mean he’s willing to let Venezuela off the hook on its unpaid debts.
The 53-year-old distressed debt veteran says he made a “substantial investment” in its defaulted bonds, mostly in November, betting authoritarian President Nicolas Maduro would finally be forced out of office. Now as the opposition leader strengthens his claim as rightful head of state, Koenigsberger is optimistic the economically ravaged country can tap its vast oil reserves to quickly get back on its feet -- and, crucially, resume payments to creditors.
Granted, Koenigsberger concedes bondholders like him must be mindful of pounding the table for money from a country where starvation is commonplace. And he is quick to point out he’s willing to offer Venezuela some debt relief. That could still put him at odds with the new government. Harvard economist Ricardo Hausmann, an informal adviser to Guaido, has warned creditors to brace for significant pain because the country needs to earmark as much money as possible to help everyday Venezuelans.
“Where I agree with Ricardo is that Venezuela will need time to recover,” said Koenigsberger, who oversees $5.5 billion at Gramercy Funds Management. “But Venezuela doesn’t have a debt problem.”
The Greenwich, Connecticut-based firm has more than $250 million dedicated to its Venezuela strategies.
Koenigsberger, whose love of Latin American politics and history go back to his undergrad days at the University of California at San Diego is no stranger to emerging-market debt crises. His firm has been part of bondholder groups in Ecuador, Argentina and Russia, negotiating the contentious sovereign-debt restructurings that typically occur when cash-strapped countries default.
He figures with proper management of the world’s largest proven oil reserves, Venezuela could surpass its prior peak in oil production within one or two decades. A relatively quick recovery would let the country generate enough revenue so that bondholders could recoup most of what they’re owed in three to five years, without the need for a severe writedown.
We believe the opposition “understands it’s not about getting X or Y from creditors, but the amount of investment you can catalyze by putting the restructuring behind you,” Koenigsberger said. “We don’t want the debt restructuring to be a zero-sum game.”
The 53-year-old distressed debt veteran says he made a “substantial investment” in its defaulted bonds, mostly in November, betting authoritarian President Nicolas Maduro would finally be forced out of office. Now as the opposition leader strengthens his claim as rightful head of state, Koenigsberger is optimistic the economically ravaged country can tap its vast oil reserves to quickly get back on its feet -- and, crucially, resume payments to creditors.
Granted, Koenigsberger concedes bondholders like him must be mindful of pounding the table for money from a country where starvation is commonplace. And he is quick to point out he’s willing to offer Venezuela some debt relief. That could still put him at odds with the new government. Harvard economist Ricardo Hausmann, an informal adviser to Guaido, has warned creditors to brace for significant pain because the country needs to earmark as much money as possible to help everyday Venezuelans.
“Where I agree with Ricardo is that Venezuela will need time to recover,” said Koenigsberger, who oversees $5.5 billion at Gramercy Funds Management. “But Venezuela doesn’t have a debt problem.”
The Greenwich, Connecticut-based firm has more than $250 million dedicated to its Venezuela strategies.
Koenigsberger, whose love of Latin American politics and history go back to his undergrad days at the University of California at San Diego is no stranger to emerging-market debt crises. His firm has been part of bondholder groups in Ecuador, Argentina and Russia, negotiating the contentious sovereign-debt restructurings that typically occur when cash-strapped countries default.
He figures with proper management of the world’s largest proven oil reserves, Venezuela could surpass its prior peak in oil production within one or two decades. A relatively quick recovery would let the country generate enough revenue so that bondholders could recoup most of what they’re owed in three to five years, without the need for a severe writedown.
We believe the opposition “understands it’s not about getting X or Y from creditors, but the amount of investment you can catalyze by putting the restructuring behind you,” Koenigsberger said. “We don’t want the debt restructuring to be a zero-sum game.”
