Hedge fund Dromeus turns Greek tragedy to triumph with 160 pct gain

By Kelly Bit

Dromeus Capital Management SA is turning Greek tragedy into triumph.

When Achilles Risvas, chief executive officer of the $240 million investment firm, and Jason Manolopoulos started a fund to wager on Greece’s recovery in October 2012, the country was in intensive care with euro-area governments pushing its leadership to make deeper spending cuts after a bailout. Greece has since largely repaired its finances, returned to the bond market, and according to economists will grow its economy for the first time since 2007.

That’s helped the Dromeus Greek Advantage Fund gain 26 percent this year through June, according to an investor update obtained by Bloomberg News. The strategy has gained 160 percent since inception, compared with less than 10 percent for the average hedge fund.

Dromeus, based in Geneva with an office in Athens, timed the bet well. Within months of the fund’s inception, Greece had convinced international creditors it could press ahead with budget cuts and largely curbed speculation the country would have to exit the euro. Other investors were also taking notice. Daniel Loeb’s $14 billion New York-based Third Point LLC started a Greek fund in April 2013 and billionaire John Paulson began investing in the nation’s banks that year.

Attractive returns

“There was heavy influence to lend to the Greeks and not let them default,” said Nick Markola, head of research at Fieldpoint Private, a $3 billion Greenwich, Connecticut-based private bank and wealth-advisory firm. “Hedge funds have seen the opportunity to capitalize and get attractive returns.”

Manolopoulos, author of “Greece’s ‘Odious’ Debt,” a 2011 book detailing the origins of the country’s economic mess, didn’t immediately provide...