Sunday 15 September 2019

Hasenstab best known for reaping billions in Irish recovery

Michael Hasenstab
Michael Hasenstab

Buying Irish government bonds at knock-down prices in 2011 eventually saw California-based Michael Hasenstab net a massive €5.6bn return on the investment for his employer Franklin Templeton and its clients.

At one stage, Franklin Templeton held a tenth of all Irish government bonds, and was the country’s biggest lender after the EU and IMF bailout funds. 

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Mr Hasenstab’s contrarian bet saw him buy Irish bonds from the original holders, who ditched them fearing a default. But he hoovered up the IOUs because he remained confident both in the longer-term prospects for the Irish economy and the then-government’s determination to honour the debt. He was rewarded with a massive 70pc return, or around €5.6bn.

The same year Franklin Templeton began investing in Irish debt, Mr Hasenstab made a similar bet on out-of-favour Hungarian bonds, again netting billions. However, he has not always been as successful.

Just last week, Mr Hasenstab’s funds lost $1.8bn (€1.6bn) in a day, when a bet on Argentina turned dramatically sour.

A high-profile bet on Ukraine also went bad in 2014 after Russia’s invasion of Crimea.

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