Gramercy sees value in buying up indebted China real estate


Distressed debt specialist Gramercy Funds scents an “opportunity for experienced credit investors” in the cash-strapped Chinese real estate sector and has been loading up on property company bonds.

Founder Robert Koenigsberger made a bundle off Russian debt in the late 1990s and has played big roles in restructuring Argentine government bonds.

Now the $5.5bn investment manager sees parallels in China, where the value of property company bonds has plummeted since the giant developer Evergrande began missing payments on its debt last year. From zero exposure to the sector before Evergrande, Gramercy has built up to $200mn in corporate bonds and expects to buy more.

“Around 10 of the [companies] that we’re focused on definitely trade below an inherent value that we think that we can achieve by being a part of catalysing a restructuring in a reasonable period of time,” Koenigsberger said.

“It reminds me of the ‘good old days’ of…

Read more…