“Awesome stories”
- Executive Director, Goldman Sachs
Hello everyone.
No newsletter next week as I’m away on holiday in Cornwall. We like St Mawes, Rock and Polzeath for the surf. Eating at The Tresanton, The Idle Rocks, The Mariners and St Enodoc Hotel. For now, enjoy the market wizardry of Paul Singer…
Back bigger than ever in September - let’s go!
This week’s newsletter: Ken Griffin toasted at Leopold’s wedding, Chris Hohn backing Italian luxury, Paul Singer’s legendary Argentina move and why everyone wants ‘social assets’.
The Hedge Fund Manager Who Took On Argentina...And Won
Paul Singer was owed money by Argentina, so he captured one of their warships.
Here’s the unbelievable true story of money, power & reputation…
In 2000, Paul Singer’s hedge fund Elliott Management bought $600 million worth of Argentine bonds for just $100 million.
Soon after, Argentina plunged into an economic depression.
A few years later, the Argentinian President urged bondholders to accept deeply discounted repayment terms, as little as 25-cents on the dollar.
92% of bondholders took the deal.
Paul refused.
He took the fight global, suing Argentina and attempting to seize their assets - from central bank reserves to pension funds - in order to get the debt repaid in full.
It wasn’t working.
So Paul made an audacious move...
When an Argentine naval vessel called ‘The Libertad’ approached a port in Ghana, it was met with an unexpected standoff.
Paul had secured a court order to seize the ship.
His hedge fund was demanding a $20 million payment from Argentina before it was released.
News of the seizure sparked outrage across Argentina.
Their Minister of Economy called it “an affront to national sovereignty”.
The Argentine President said: “They can keep the frigate, but not the dignity of the Argentine Republic!”.
Paul remained silent throughout the ordeal, but just prior to the stand-off had publicly stated:
“Sovereign nations must be held to the same standards as individuals when it comes to repaying debts.”
The ship was eventually released, but the move sent shockwaves through bond markets.
Just over 15 years after his initial $100 million investment in Argentinian sovereign debt, the government finally agreed to settle and paid $2.4 billion to Paul’s firm.
Paul guards his privacy fiercely and gives very few interviews, but a journalist once asked him if these kinds of legal skirmishes were fun...
He stopped, raised his eyebrow, then turned to the journalist:
“Fun? Skiing is fun...this is work!”
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Finance Culture
Investors went crazy this week buying up ‘social assets’ - AI defensive moves perhaps? Jeff Bezos is buying part of Liverpool FC, Apollo is lending to the NY Yankees and Josh Kushner and Bob Iger are trying to buy the LA Lakers. Oh, and EQT is buying an Aussie Rugby League team in their foray into sports investing.
Apparently Ken Griffin was personally thanked in the toasts at Leopold Aschenbrenner’s wedding - which took place days after the Situational Awareness founder sold the bulk of his public assets to the Citadel mogul in a fire sale. Somewhere in America, Michael Lewis is writing a book about this.
Market genius Sir Chris Hohn is making an interesting play into luxury Italian hotels, loaning them cash through a third party private credit vehicle he is on the IC of.
Ray Dalio bet the entire Bridgewater business and his life savings on one single trade - and lost. I created a 2-min video on Instagram here. The page now has 100,000 views.
Last year I went on TBPN (before they sold to OpenAI for $100m-200m…) and talked to John and Jordi about meeting Ray Dalio and host of other senior investors. Here for the clip.
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Recommendation
Paul Singer rarely gives interviews, so check this one out with Nicolai from NBIM. Or here for the original BBC article of the ARA Libertad’s homecoming in 2013.
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Joseph Cass