Hasenstab slashes Irish bond holdings by 32%

Michael Hasenstab, one of the world's most famous bond investors, cut about a third of holdings of Ireland's debt across two Franklin Templeton Investments funds, after snapping up the securities at the height of country's financial crisis.

The amount of Irish debt held by US and European versions of the Templeton Global Bond Fund and Templeton Global Total Return Fund fell 32 per cent to €4.7 billion euros ($5.3 billion) face amount in the fourth quarter from the third quarter, according to figures compiled by Bloomberg from filings. The market value of Irish bond holdings in the funds fell by $3.63 billion to $7.33 billion.

Hasenstab declined to comment on the firm’s Irish strategy.

Hasenstab’s big trades have helped him become one of the world’s most successful bond fund managers. For Ireland, Hasenstab helped trigger a turnaround in sentiment by buying the nation’s debt in July 2011, eight months after the country entered an international bailout. At one point, Hasenstab’s funds held about 10 per cent of Irish government debt and his wager has paid off.

Irish bonds have returned about 68 per cent since the end of 2011, according to an index compiled by Bloomberg.

“When no one was buying, we stepped in. Now the world is interested in Ireland again, and to us, it proves having patience can be rewarded,” Hasenstab said in a posting on Franklin’s website in January last year.

Bloomberg