Greylock Capital Management

Greylock Capital Management, LLC (Greylock Capital) is a U.S. Securities and Exchange Commission registered alternative investment adviser that invests in undervalued, distressed, and high yield assets worldwide, particularly in emerging and frontier markets. As is the case with comparable funds, the firm's investor base consists largely of institutional investors and a limited number of high net worth individuals. As a group, institutional investors may include banks, credit unions, insurance companies, pension funds, hedge funds, REITs, endowments and mutual funds. As is common with many asset management firms, Greylock Capital is organized across a series of onshore and offshore limited partnerships.

Greylock Capital Management, LLC
Private
IndustryAsset management
Founded2004
FounderHans Humes (CEO)
HeadquartersNew York, New York
Key people
AJ Mediratta (co-president)
ProductsHedge fund
Emerging markets
WebsiteGreylockCapital.com

History

Greylock Capital was founded in 2004 by Hans Humes from a portfolio of emerging market assets managed by Humes while at Van Eck Global. AJ Mediratta is an additional equity partner and joined the firm in 2008 from Bear Stearns,[1].

Restructuring activity highlights

Greylock Capital and its partners have participated on a number of corporate and sovereign debt restructurings in emerging markets. A selection of the firm's sovereign debt restructurings is below.

Argentina

Greylock Capital Founder Hans Humes served as co-chair of the Global Committee of Argentina Bondholders following the Argentine Republic's debt default in 2002. The Argentine default is the largest sovereign default in history.[2][3]

Greece

Greylock Capital served on the 12-member steering committee of investors engaged in the Greek sovereign debt restructuring. The firm was the sole American representative on the Greek bond steering committee, which controlled approximately 20% of all outstanding external Greek government debt. Greylock Capital was cited as one of the earlier fund investors in Greek debt, investing as early as 2011 when the bonds were trading as low as 12 cents on the dollar. Greylock Capital promoted the concept of debt warrants, whereby Greek government repayments were tied to economic growth. The subsequent exchange offer was the largest sovereign debt restructuring in history. [4][5][6][7][8][9]

Belize

Following Belize's 2012 default on approximately US$500 million debt, a creditor committee of approximately 20 institutions formed.[10] The creditor committee was co-lead by Greylock Capital and Zurich Insurance Group and several multi-lateral institutions were engaged as part of the restructuring process (i.e. the International Monetary Fund, the Inter-American Development Bank, the Caribbean Development Bank, US Department of Treasury, Institute of International Finance and Paris Club.[11][12] A restructuring was concluded with the government in 2012 that achieved 86% investor participation. Such high participation rates are desired by countries undergoing debt restructuring because it significantly reduces the likelihood of future investor-initiated litigation.

Mozambique

A global creditor committee formed in 2016 following Mozambique's announcement of default on its outstanding external sovereign debt. Committee discussions focused on the need to create near-term fiscal space for the country, which remains one of the world's poorest, while preserving upside for bond investors associated with Mozambique's vast offshore gas reserves. [13] Consideration was also given to initiatives to improve transparency and resolve the scandal around undisclosed loans, both of which were viewed as critical in the country's efforts to normalize its relationship with the IMF and bilateral donors. [14] Greylock Capital led the negotiations that resulted in a preliminary agreement on restructuring terms that were finalized in late 2019. An exchange offer for the existing bonds closed in October 2019 with a final participation rate in excess of 98%.[15]

Barbados

In October 2019, Barbados came agreed to terms with a creditor committee that allowed the country to restructure its approximately 7bn USD in sovereign debt. The creditor committee, co chaired by Eaton Vance Management and Greylock Capital, agreed to terms including an estimated 26% principal haircut and a new instrument maturing in 2029. The new bond includes a "Hurricane Clause", which allows the island to suspend payments and capitalize interest in the event of a weather-related disaster.[16][17]

Liberia

Greylock Capital served on the creditor committee of an investor group restructuring Liberia's pre-crisis debt, a transaction which enabled the country to regain international capital. As the largest commercial creditor to Liberia, Greylock Capital used its strong relationships with the existing government to lead a committee of investors to work with multi-lateral and non-financial partners to provide a framework for a successful restructuring of outstanding Liberian claims. The restructuring, completed in April 2009, featured several innovative elements, including Liberia's ability to do a significant, one-time only restructuring of all commercial claims. Unlike so-called vulture funds, Greylock Capital was highlighted for its negotiated method of sovereign debt restructuring.[18]

Ivory Coast

After having issued $2.8 billion in Brady Bonds in 1998, the Republic of Ivory Coast defaulted on the debt in 2002 upon the outbreak of a civil war. Greylock Capital participated in the Republic's creditor committee and played a lead role in closing a deal between the republic and bondholders.[19] Greylock Capital engaged multilateral institutions, including the World Bank, in order to effect a restructuring that was compatible with creditor rights and with the principles of debt relief under the HIPC Initiative.[20] The Ivory Coast restructuring was completed in 2010.[21]

gollark: I did GCSE German so I vaguely remember a bunch of the grammar and words.
gollark: It seems like this is being approached from the perspective of "you need to show very well that there's a good reason to make this legal" and not the other way round, because apparently people are just used to "of course things which *might* be bad are banned".
gollark: I don't know. Do you know? Does *anyone* actually have high-quality information on this?
gollark: I think it mostly got lost to the various C4 incidents.
gollark: Sorry, imminent*ly*.

References
  1. Mediratta to start hedge funds for Greylock, Pensions & Investments, June 13, 2008
  2. Timeline: Argentina's Road to Ruin, The Washington Post, October 3, 2003
  3. Argentina Bonds Rally Despite Risk, The Wall Street Journal, Sept. 29, 2013
  4. Greylock: It’s all Greek to us, The New York Post, February 9, 2013
  5. Legal Memorandum Summarizing Recent Argentine Legislation and Bondholder Remedies
  6. United Nations Report of the Joint Committee on Strengthening the Framework for Sovereign Debt Crisis Prevention and Resolution, page 17.
  7. Greece seeks new debt deal, CNN, February 4, 2015.
  8. Bondholders Could Lose Big In Greece Bailout Plan, National Public Radio, February 20, 2012.
  9. Tsipras a Mix of Crazy and Brilliant: Greylock's Humes, Bloomberg, July 6, 2015.
  10. Belize Default Looms as Negotiations Continue, Wall Street Journal, September 19, 2012.
  11. Default Concerns Make Belize Bonds Worst in Emerging Markets Bloomberg Business, July 31, 2012
  12. IBID, The creditor group led by Greylock Capital held approximately $300 million USD of the $500 million USD in outstanding sovereign debt.
  13. Mozambique and Bondholders Near $900 Million Restructuring, Wall Street Journal, August 28, 2019
  14. Mozambique to Finally Restructure Eurobonds by End-September, Bloomberg, August 27, 2019
  15. [ https://www.reuters.com/article/us-mozambique-debt-restructuring/mozambique-gets-green-light-for-eurobond-debt-swap-plan-idUSKCN1VU1WB Mozambique gets green light for Eurobond debt swap plan], Reuters, September 9, 2019
  16. "Barbados reaches debt restructuring deal with creditors". latinfinance.com. Retrieved 2019-12-17.
  17. "'Hurricane clause' in bonds helps countries struck by disaster". ft.com. Retrieved 2019-12-17.(subscription required)
  18. BBC Liberia Debt Restructuring, BBC News, March 2, 2010
  19. Developing Nations Anxiously Watch Fed at Jackson Hole, Foreign Policy Magazine online, August 21, 2014
  20. "'Hurricane clause' in bonds helps countries struck by disaster". ft.com. Retrieved 2019-12-17.
  21. "'Ivory Coast reaches deal on debt restructure offer". reuters.com. Retrieved 2019-12-17.

See also

Asset management company

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