After the US arrested Venezuelan President Nicolas Maduro and claimed that it would manage the country, Venezuelan bonds rose sharply, bringing windfall wealth to hedge funds and other investors who had previously bought the country's bonds at extremely low prices. The defaulted bonds issued by Venezuela and its state-owned oil company PDVSA jumped on Monday. The purchase price of sovereign bonds due in 2027 rose 7 cents per dollar face value, or 22%, the biggest increase since 2023. This raised the price to 40 cents, double what it was just six months ago, but it is still below the recovery value investors think the country could achieve if it were to push for debt restructuring. After only 14 hours of downgrading Venezuelan bonds to a lower ratio, Barclays upgraded its rating to the same weight, saying that the initial view had been “overturned by the situation” after US intervention. “The strength shown by the US is impressive, and its promise to 'manage the country' has surpassed everyone's expectations, even at the policy level,” said Bradley Wickens, founder of Broad Reach Investment Management, a macro hedge fund focused on emerging markets. “The possibility of a further increase of at least 50% is very high.” The company's $1.5 billion Broad Reach Master Fund has returned more than 5% this year, compared to 12% in 2025. According to Wickens, the jump in performance is due in large part to the fund's bet on Venezuela, and the fund has been making this bet since Trump was likely elected in late 2024. He added that the fund's holdings in the country's bonds are impressive and are still “a highly confident transaction.”

After the US arrested Venezuelan President Nicolas Maduro and claimed that it would manage the country, Venezuelan bonds rose sharply, bringing windfall wealth to hedge funds and other investors who had previously bought the country's bonds at extremely low prices. The defaulted bonds issued by Venezuela and its state-owned oil company PDVSA jumped on Monday. The purchase price of sovereign bonds due in 2027 rose 7 cents per dollar face value, or 22%, the biggest increase since 2023. This raised the price to 40 cents, double what it was just six months ago, but it is still below the recovery value investors think the country could achieve if it were to push for debt restructuring. After only 14 hours of downgrading Venezuelan bonds to a lower ratio, Barclays upgraded its rating to the same weight, saying that the initial view had been “overturned by the situation” after US intervention. “The strength shown by the US is impressive, and its promise to 'manage the country' has surpassed everyone's expectations, even at the policy level,” said Bradley Wickens, founder of Broad Reach Investment Management, a macro hedge fund focused on emerging markets. “The possibility of a further increase of at least 50% is very high.” The company's $1.5 billion Broad Reach Master Fund has returned more than 5% this year, compared to 12% in 2025. According to Wickens, the jump in performance is due in large part to the fund's bet on Venezuela, and the fund has been making this bet since Trump was likely elected in late 2024. He added that the fund's holdings in the country's bonds are impressive and are still “a highly confident transaction.”