Wednesday, September 3, 2014

Is Now A Good Time To Invest In Argentina?


Algodon Group is no longer alone in its investment view on Argentina, despite Argentina making more negative headlines lately due to its "technical" default situation.  However in light of (or more precisely, because of) that, very exciting developments have been making the news of late: a number of billionaire investors and big-businesses are buying Argentine assets.

Please read the quote below from billionaire hedge fund investor Dan Loeb, who I believe sums up this development perfectly.
"We believe the holdout creditors and the government are finally likely to arrive at an agreement by year-end. Doing so would undoubtedly benefit the Argentinian economy. Beyond this, after a decade of virtually no foreign investment, an impending change in political leadership at the end of 2015 should lead to more market-friendly policies. This should increase foreign direct investment and boost the economy. We hope to uncover additional investment opportunities in Argentina as it emerges from its long malaise."
Seekingalpha.com's editorial Is Now The Time To Invest In Argentina? names other billionaire investors having bought "Argentina" such as George Soros who only recently doubled his YPF shares, now worth $450 million, as well as Richard Perry and Carlos Slim who are also two of YPF's biggest stakeholders.  Michael Novogratz agrees and is bullish on Argentina after its default, telling CNBC that he thinks the situation is "so bad, they're good…we're long stocks, long bonds, long currency…” Click here for the article.

These notable investors have moved into Argentina within the last year, investing anywhere from hundreds of millions to tens of billions, due to the changes and opportunities they see happening in Argentina's future:

  • Dan Loeb, Perry Capital - “We are in the midst of a critical inflection point for the country”
  • Michael Novogratz, Fortress Investment Group LLC - “We're long stocks, long bonds, long currency."
  • Richard Perry, Perry Capital - Increased shares of YPF
  • George Soros doubled his YPF shares now worth $450 million
  • David Martinez, Fintech Advisory Group - $960 million in Telecom Argentina
  • Kyle Bass - "Now is the time to start investing."
  • General Motors $740 million
  • Chevron $2.8 billion toward 15 billion
  • Mercedes-Benz $170 million
  • Accor Hotels $100 million
  • Yamana Gold $450 million
  • Toyota $800  million
  • Germany's Wintershall & Total SA
  • SHELL $500 million
  • Chinese direct investments in infrastructure $14 billion
With all of this recent news, we are more excited and focused than ever on the success of Algodon!  Have a great day!

- Scott Mathis