Hedge fund run by former economy minister Nicolás Dujovne posts 22% gain

Nicolás Dujovne resigned as Argentina’s top economic policymaker in 2019, as a chaotic post-election sell-off shook the country’s assets over fears that the pro-business policies of then-president Mauricio Macri were coming to an end.

More than five years later, a bond rally sparked by Javier Milei’s market-friendly agenda has the former economy minister reaping double-digit gains — this time, from behind his trading desk in Buenos Aires.  

Tenac Global Fund, a hedge fund co-founded by Dujovne in 2020, rose 22 percent net of fees last year, according to an investor note reviewed by Bloomberg. Gains were driven by wagers on some of the world’s riskier debt — especially Argentine bonds, which contributed almost 700 basis points to its 2024 performance. Tenac has approximately US$144 million in assets under management, according to a person with direct knowledge of the matter. 

The fund’s annual gain more than triples the performance of a developing-world index for 2024. Industry research firm BarclayHedge, a separate entity from the bank, lists the 2024 return for Tenac at 21.7 percent, making it the second-best performer among hedge funds focused on EM fixed income tracked by the firm.

“Among the 10 sovereigns that generated the highest returns in 2024, Tenac was involved with nine of them throughout the year. We only missed out Bolivia,” the fund told clients.

Dujovne co-founded the firm with Fernando Jasnis, who also served at Argentina’s Economy Ministry, and José Antonio González Anaya, Mexico’s former finance minister during the administration of President Enrique Peña Nieto. Pablo Guidotti, a senior official in Argentina’s government during the late 1990s, joined the fund in 2022.

High-yield bonds have delivered stellar returns over the past two years, driven by emerging economies reaching funding agreements with institutions such as the International Monetary Fund, as well as the implementation of market-friendly reforms.

A Bloomberg gauge of EM high-yield dollar bonds soared 15 percent last year, its best annual performance since 2016. Credits including Argentina and Lebanon handed investors triple-digit returns in 2024, far outperforming the 1.9 percent return on EM investment-grade debt.

Milei’s plans to remake the economy were a key support for Argentine debt last year, sending prices for some of the country’s sovereign bonds near levels last seen six years ago, during Dujovne’s tenure as Macri’s economic chief. 

Dujovne presided over a successful economic recovery and Argentina’s return to international markets at the start of his term, though the good times unravelled in 2018 as a historic drought hit crop exports and policy zigzags spooked investors, provoking a peso selloff and a recession that eventually led to Macri’s loss.

Argentina sovereign bonds maturing in 2029 are down 2.3 percent so far this year at 76 cents on the dollar. That’s still way up from below 30 cents, where they traded before Milei won the 2023 presidential election.

Investors are now awaiting the results of negotiations between Argentina and the IMF for an agreement that government officials hope to conclude in April. Dujovne helped negotiate a US$57-billion IMF bailout in 2018 — the largest in the Fund’s history — though the agreement was eventually derailed by post-election market volatility, with the country receiving only US$44 billion. 

The agreement was replaced by Macri’s successors in a Peronist government, which failed to comply with their deal.

Some firms, including Bank of America, are expecting Argentina to secure a US$20-billion program — including an upfront payment of up to half that amount. Traders are also keen to see whether Milei unwinds currency controls as part of the future programme. 

Investors are “underpricing” the possibility of Argentina agreeing to more austerity measures, BofA strategists including Lucas Martin wrote in a note last month.