Ashmore’s Distressed Debt Flops Spur Worst Sell-Off in a Decade
Ashmore’s Distressed Debt Flops Spur Worst Sell-Off in a Decade
(Bloomberg) -- Even as Ashmore Group Plc’s bond funds endured blow after blow in the past year from risky bets that came undone, its stock price soared to a record -- until now.
In the past three days, the London-based money manager’s shares plunged 16%, heading for the biggest slide in more than a decade. The tumble reflects a crash in oil prices that rattled risky assets already on edge over the spreading coronavirus.
The $5.3 billion Ashmore Emerging Markets Short Duration Fund offers a study in what went wrong. Roughly two-fifths of its assets are allocated to Ecuador, Argentina and Lebanon, according to filings as of Dec. 31. Those are the three major bond markets suffering the most from Monday’s market bloodbath, data compiled by Bloomberg show.
To make matters worse, one of the fund’s biggest bets was on Lebanon’s $1.2 billion Eurobond due Monday. Over the weekend, officials in Beirut said they won’t repay that bond, setting the stage for the country’s first default since its independence in 1943.
Jan Dehn, a spokesman for Ashmore, didn’t respond to requests for comment.
To contact the reporter on this story: Ben Bartenstein in New York at bbartenstei3@bloomberg.net
To contact the editors responsible for this story: Carolina Wilson at cwilson166@bloomberg.net, Alec D.B. McCabe
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