Monday, November 9, 2009 2 comments ++[ CLICK TO COMMENT ]++

Robert Smith: King of the "Jungle Bonds"

The man once dubbed “king of the jungle bonds” recounts his adventures as a pioneer in frontier markets in Riches Among The Ruins (Amacom). One story not in the book was his biggest coup, and it happened to involve Angolan debt.

Back in 1995, a hedge fund was going out of business and Mr. Smith's firm snapped up about $20-million of Angolan bonds at 5 cents on the dollar.

At the time, the government wasn't paying up. But Mr. Smith, whose investing hallmark is patience, won a judgment in a British court after a three-year battle. When the Angolan central bank realized its assets in Europe were about to be liquidated, the government quickly paid off the bonds, to the tune of 100 cents on the dollar, plus 40 cents interest.

“That was not a bad recovery,” he joked.

(source: "Robert Smith goes where other bond investors fear to tread" by Brian Milner, The Globe & Mail. November 9, 2009)

I never heard of Robert Smith until I read Brian Milner's story in The Globe & Mail touching on obscure bond markets throughout the world. Robert Smith looks like an interesting fellow who has dealt with bond markets in undeveloped and developing countries. All of this is totally out of the reach of small investors but it's still interesting to think about it.

I looked up Robert Smith's book, Riches Among the Ruins: Adventures in the Dark Corners of the Global Economy, and it looks intriguing. I haven't read the book but it sounds like a good book for those looking for an investing book with some danger and adventure thrown in—yes, it seems you can utter adventure and investing in the same breath ;)

Robert Smith's blog, Notes from the Dark Corners of the Global Economy, which I just discovered, also seems quite interesting. Anyone with a global interest might want to check out the blog.


2 Response to Robert Smith: King of the "Jungle Bonds"

November 11, 2009 at 5:29 PM

In Hedgogging, Barton Biggs mentions anonimously a hedge fund manager looking for oppotyunities in frontier countries. I wonder if it is him.

BTW, Fannie and Preddie preferreds are trading 4c on the dollar after the goverment bailed out the subordinated debt at a premium. The USA government in an Angolian predicament?

Sivaram Velauthapillai
November 11, 2009 at 6:34 PM

Is it fair to say that you will be taking a page out of Mr. Smith's book and buying up all the GSE preferreds and suing the government threreafter? ;)

On a serious note, Robert Smith seems like an interesting character. I have to read his book but this is the type of guy you see in movies. You know, dealing with dictators, shady characters, working from obscurity, etc...

Post a Comment