Argentina market rout pummels Brazilian hedge fund (updated)
13/08/2019 23:45
(Updates prices, adds other funds with Argentine exposure)
By Rodrigo Campos
NEW YORK, Aug 13 (Reuters) - A Brazilian hedge fund was
among the casualties of Monday's market rout on Argentine
assets, with at least 75 percent of its equity exposure
suffering losses between 25% and 59%.
Newfoundland Capital Management, based in Sao Paulo, was hit
with a loss on paper of around $55 million, as its bets on four
Argentine companies in agribusiness, natural gas, energy
distribution and telecommunications imploded.
According to regulatory filings, just over 50% of
Newfoundland's portfolio is split in New York- and Buenos
Aires-traded shares of agribusiness Cresud CRESY.O CRES.BA ,
stocks that fell on Monday 38% and 25%, respectively.
U.S.-traded shares of electricity distributor Edenor
EDN.N , which plummeted 59% on Monday, amount to over 16% of
Newfoundland's portfolio.
The one-day paper losses in those two companies alone amount
to nearly $50 million. The remaining loss comes from
Newfoundland's exposure to Telecom Argentina ADRs TEO.N , which
was down 33% on Monday, and Transportadora de Gas del Sur
TGS.N , which fell 48%.
The most recent regulatory filings, from last May, list
holdings as of March 31. Newfoundland did not return calls or
emails seeking comment or confirmation of any material change in
its positions since. The Argentine local filing in Cresud shares
is as of June 2018.
Previous filings show the fund has mostly been building up
its positions in the ADRs since at least mid-2018. In the case
of Nasdaq-traded Cresud shares, a position of 1.5 million shares
from the third quarter of 2017 has grown in every quarter but
one since, and was built up to 5.8 million shares.
Four of the five stocks in Newfoundland's portfolio that
tumbled on Monday were up between 0.8% and 8.8% each on Tuesday,
while Edenor was down another 3.5%.
Disclosure of stock holdings as of the end of June,
including Argentine ADRs, are due to the U.S. Securities and
Exchange Commission this week. The filings will show how exposed
these and other funds were as of June.
Current filings show billionaire investor David Martinez's
Fintech Telecom LLC held 30.8% of Telecom Argentina as of
mid-April. That position would have suffered a one-day loss of
over $132 million on Monday.
Large bond holders also figure among those seeing losses
from Monday. Franklin Templeton's flagship $33 billion Global
Bond Fund TPINX.O , which has 3.64% in Argentina and is
overseen by Michael Hasenstab, was down 1.79% on Monday alone
-the worst performing fund in its category, according to
Morningstar data.
Monday's market rout in Argentina followed results from a
primary election that dealt a blow to market-friendly president
Mauricio Macri's re-election chances in October. Argentina's
peso and dollar-denominated bonds fell again on Tuesday.
urn:newsml:reuters.com:*:nL2N2590AA
(Reporting by Rodrigo Campos; additional reporting by Christian
Plumb in Sao Paulo and Jennifer Ablan in New York; editing by
Dan Burns and Rosalba O'Brien)
((rodrigo.campos@reuters.com; @rodrigocampos; +1.646.223.6344;
Reuters Messaging:
rodrigo.campos.thomsonreuters.com@reuters.net))