Creditflux Newsletter

Credit is an investment with a modest amount of upside, a huge downside if things go wrong, and plenty of nail-biting uncertainty in between.

So perhaps it is surprising that more credit specialists have not followed the lead of Loïc Fery, chief executive of London-based credit hedge fund manager Chenavari, and moved into the similar business of owning a sports club.

Fery recently became president and majority owner of a French football (soccer) club. FC Lorient Bretagne Sud may be a little less chic than, say, Paris Saint-Germain or Marseille, but it plays in the same division.

Plenty of observers have noted that Greece is now a riskier credit investment than Turkey, its arch-rival, which it has long viewed as its economic inferior (see page 25).

There are also a good few Greek companies that trade inside the sovereign, such as telecoms company HTO, which has spreads of less than half that of Greece.

To date, however, only one of the country’s banks, National Bank of Greece, is inside the sovereign. Some traders believe that makes the Greek banks a good relative value play against the sovereign.

After all, in eurozone Europe, there is no more reason that a sovereign default should drag down one of the country’s banks than, say, a default by the state of California should trigger the collapse of Wells Fargo.