Firms push for Venezuela investment trip places

Firms push for Venezuela investment trip places

London based banks and asset managers are jostling for places on an exclusive trip targeting potential investment opportunities in Venezuela. Founder and chair Charles Myers, of Signum Global Advisors, who is organising the trip next month, said: “We’ve had very strong interest from companies in the UK and Europe, including banks and insurers and asset managers – especially some of the holders of defaulted sovereign bonds

Investor interest in Venezuela has peaked following the removal of president Nicolas Maduro by US forces. The country is now under the control of interim president Delcy Rodriguez. The interest in investing there has risen to the extent that veteran emerging market investor Mark Mobius has said the capture of Moduro means he would consider putting money to work again in Venezuela.

Mobius, who is now chief investment officer of the Mobius Emerging Opportunities fund, exited investment in Venezuela during his time at US asset management giant Franklin Templeton after Hugo Chavez rose to power in 1999.

Hedge funds and asset managers are among those who benefited from a recent Venezuela debt rally. In January, the country’s government bonds rose to a level not seen since it defaulted on its sovereign debt in 2017.

Myers said demand for places on the Venezuela trip, which he expects to be “more US-centric” in terms of investors, has been three times higher than for similar visits he has led to Ukraine and Syria.

He said: “We’re going to cap it at 20 to 25 spots, otherwise it gets logistically challenging. We’re going to give seats for our top clients, but also those that are most serious about investing.”

Myers, a former banker who previously advised Hillary Clinton and Joe Biden during their respective US presidential campaign, said there was a potential $500 bn investment opportunity in Venezuela over the next decade. Oil and gas will be a major focus, but Myers said infrastructure and tourism would also be areas of growth.

“This is a country emerging from 25 years of dictatorship and economic mismanagement. Everything needs to be rebuilt,” he said. “It’s much broader than just oil and gas.”

Amundi, Europe’s largest fund management group, is among the heavyweight investors taking a closer look at Venezuela.

“We are looking at these opportunities and doing our analysis,” said Joe Delvaux. a senior emerging markets portfolio manager at Amundi. “The majority of emerging market investors right now will be trying to form a view on Venezuela.” He added: “Ultimately, some of the best performing trades have been coming out of recoveries. You have to look at each case and each carries its own risks,” he added

Nicolas Jaquier, emerging markets fixed income portfolio manager at Ninety One Investments, said, “very significant obstacles and uncertainties remain” in Venezuela.

“The key issue is the legitimacy and durability of Rodriguez’s presidency,” he said. “As an interim caretaker – and given chavismo’s (a left-wing populist political movement named after former president Hugo Chavez) landslide defeat in the 2024 election – there is no clear legitimacy for the current leadership to conduct debt restructuring negotiations.”

He added: “A successful restructuring ultimately requires a legitimate government able to credibly commit to reforms, typically anchored by an International Monetary Fund support programme. And that should entail the organisation of fresh, free and fair elections.”

Myers added that Venezuela needed to address “sanctions and the domestic regulatory framework in order to give confidence to foreign investors looking to allocate capital.

It would also need to ensure procedures were in place to allow the easy flow of money in and out of the country.

Is the current government going to still be in place and provide domestic security? There are many ‘ifs’, but as always in these situations, there could be some interesting opportunities,” he said.