If you’ve been reading my Explorer Report for a while, you know that I’ve been keeping my eye on Venezuela. That’s because in addition to the country having the world’s largest proven oil reserves, it’s also extremely resource rich.
Source: MV
Additionally, I’m involved in investments in Colombia and Guyana – Venezuela’s neighbors – so I have been monitoring the geopolitical situation closely for quite some time.
During the 1970’s Venezuela was one of the wealthiest nations in the Americas and also rivaled much of Europe, as detailed in this now de-classified report by the CIA.
Unfortunately, for all of my adult life, the country has been mostly off limits for investors and even for travelers.
The Chavez era regime, which stated in 1999, morphed into the Maduro regime in 2013. Both of these de facto dictators have completely upended Venezuela’s past success and obliterated opportunities of an entire generation.
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Click the image below to watch a full explanation of what is going on in Venezuela and how investors are already positioning themselves:
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Today, as I write this, Venezuela is in chaos. That’s because there was a presidential election two days ago where voters turned out in record numbers to change the course of the country.
Despite overwhelming pre- and post-polling statistics that indicated Maduro would be voted out by a landslide, the socialist dictator is claiming he has the right to office for six more years. (He commands the National Election Council, so obviously he can control the outcome.)
While the near-term is uncertain, it’s highly likely that there are big changes coming for Venezuela. The people within the country have had it with socialism, and they are fighting for massive change. This is best symbolized by the statues of Hugo Chavez that continue to be torn down across the country.
Investing in Venezuela
What most people don’t realize is that investors have already been playing this trend. Many hedge funds have been buying up Venezuelan debt over the past decade and have seen incredible triple digit returns as of lately.
Even the Bolsa de Valores de Caracas – the Caracas stock exchange – has seen unbelievable performance over the past year with an indexed gain of over 100%!
Source: Trading Economics
Unfortunately, the financial performance of some of these investors is in sharp contrast to the people of Venezuela right now. While no one knows for certain what will happen in the future, it’s clear that momentum has shifted. That means that this could be just the beginning of an enormous boom for Venezuela, and for the risk taking investors who see the potential opportunities.
Venezuela Hedge Funds
For those of you who watched my video and are curious about the hedge funds who are already invested in Venezuelan debt, here is a brief list:
- Merlyn Advisors
- Altana Wealth
- Winterbrook Capital
- Copernico Capital Partners
- Tenor Capital
- Canaima Capital Management
- Auriga Global Investors
- Greylock Capital Management
As you’ll see by clicking on any of the above links, these are exclusive firms catering to UHNWI and other investment entities who can cut very large checks (and you’d probably need an introduction to the firm too). These investment groups have allocated capital to all kinds of Venezuelan debt that range from gold miners, to oil companies, to sovereign Venezuelan government bonds. Many of these firms have seen incredible returns over the past year.
