As the Syriza party draws Greece to ruin, several high profile fund managers are about to be roped in with it.
According to the New York Times, hedge fund legends such as David Einhorn, John Paulson, and Tom Steyer are about to get wrecked as several of their investments in the nation are poised to go belly up.
Einhorn, Steyer, and a lot of other funds apparently loaded up on Greek government bonds around 2012, and actually came up on top as the bonds, then trading at 12 cents to the Euro, shot up to 60 cents and made them billions. Paulson meanwhile decided to take a $137 million, 10% stake in a debt-free, soon to be privatized Athens water monopoly.
With Greece in doldrums and the Syriza left now holding court, things are a lot different.
Yield on the Greek government bond has now risen to 12%, and is expected to soar even further as things go completely FUBAR. Paulson’s soon to be privatized water company meanwhile saw its privatization process frozen, and is now having problems collecting payments from near-destitute Greek government entities.
With the government unwilling to even meet with them, things look even more downhill for these guys.
Well, at least they can go home and find banks, supermarkets, and gas stations open, which is more than what I could say about Greece this week.
Photo credit: Carole Raddato via Flickr