Photo: Sharon Corcoran, via the WSJ
Bearish Texan hedge fund manager, Mark Hart made a bundle by betting against Greece, Portugal, and Spain and only telling friends what he was doing.According to the people who spoke to the Wall Street Journal, Corriente Capital’s Hart is so pessimistic that he tells his investors to buy physical bars of gold.
He’s kind of paranoid, too. Mr. Hart apparently wrote that no one should reveal details about the fund and their trades in a letter to the investors in his fund, European Divergence Fund LP.
The Wall Street Journal’s sources speculate that Hart and his partner, Louis-Vincent Gave (an ex-French army Lieutenant), probably kept their moves quiet in fear of a government backlash.
The fund invests in CDS that protect against a debt default in Greece, Portugal, and Spain. Governments of course don’t encourage betting on the downfall of those nations.
The sources also suggest that Hart and Gave kept mum because they didn’t want others making the same move – which would raise the price of purchasing the insurance.
The Divergence Fund has been performing well on these bets. It was up a huge 92% in 2008. So far this year, the Divergence Fund is up 20%.
Now they’re taking some chips off the table. The fund recently returned $320 million in profits on the defaults to investors, but kept some money in the positions.