October 6, 2013
John Paulson and a clutch of bullish US hedge funds are leading a charge into Greek banks, confident that Greece, long seen as the weakest economy of the eurozone periphery, is on the turn.
Such is the strength of their interest that Greece’s big banks are now lobbying the government to consider expediting reprivatisation of the long-troubled sector.
Mr Paulson, best known for his successful wager against the US subprime mortgage market in 2007, praised Greece’s “very favourable pro-business government”.
“The Greek economy is improving, which should benefit the banking sector,” Mr Paulson told the Financial Times. He confirmed his fund, Paulson & Co, had substantial stakes in Piraeus and Alpha, the two banks that have emerged in best shape from the crisis. “[Both] are now very well capitalised and poised to recover [with] good management,” he said in rare public comments.
Paulson & Co is the highest profile of the hedge funds to invest aggressively into Greek banks. Others include Baupost, Eaglevale, Falcon Edge, York Capital and Och-Ziff, according to people close to the situation. Long-only funds, including Wellington Capital Group and Fidelity, have also taken positions.