Dromeus Capital Group has launched a Greece-focused hedge fund, investing in bonds and equities.
Achilles Risvas, chief executive officer, says although the Dromeus Greek Advantage fund will have a long bias, it will have the ability to go short if the political and economic landscape becomes instable.
Risvas says his team has identified a range of Greek equities that meet their requirements, but the fund will be more heavily focused on bonds.
It will use futures to lower the volatility of the portfolio, but will refrain from using leverage.
Risvas says the fund will “focus on opportunities created by the dramatic sell-off in Greek assets since the start of the financial crisis”.
Its size will be limited to €200 million until there are substantial improvements in the liquidity of the Greek debt and equity markets.
Risvas says the “huge uncertainty and political instability” has led investors to sell down Greek assets to prices from which the likelihood of further declines is limited.
He adds that the market is already priced for the worst case scenario of a Greek exit from the euro and an ideal environment for deep value investors.
Risvas says the fund will focus on businesses with hard assets, strong generation of cash flows and limited external funding requirements.
It will avoid sectors such as financials, retail, construction, personal goods and healthcare – where Risvas says Greek healthcare reforms will reduce expenditure on pharmaceuticals.
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