Hedge funds with sizeable exposure to Argentina, including Redwood Capital Management, booked standout gains in October after a sweeping US rescue package and a strong midterm performance for President Javier Milei’s party triggered a powerful rally across the country’s assets, according to a report by Bloomberg.
Redwood generated roughly $129m from Argentina positions across two funds, while Shiprock Capital advanced 6.4% for the month, driven by sovereign, provincial and corporate debt. Other emerging-markets specialists, including VR Capital Group and Broad Reach Investment Management, also posted strong returns, with their flagship funds rising 6.8% and 4.3% respectively. Brazil’s Vista Capital gained nearly 10% in local-currency terms, supported by ADR exposure.
Argentina has become a high-conviction – though volatile – macro trade among hedge funds betting that Milei’s market-friendly reform agenda would eventually deliver an asset-price recovery. That thesis wobbled in September after a political setback for Milei’s party, but confidence returned when US Treasury Secretary Scott Bessent stepped in during a market selloff, unveiling an unprecedented support package. The programme includes a $20bn currency-swap line, $1bn in peso purchases and assistance to secure a further $20bn from private banks.
The renewed political momentum from Milei’s midterm gains further boosted sentiment, with managers citing expectations of continued fiscal tightening, external support and improved investor inflows. Some hedge funds, including Broad Reach, entered the election period with Argentina as their largest position, viewing the US programme as covering the country’s external financing needs for the next two years.
Risks remain though: the US commitments are discretionary, Argentina faces a substantial debt repayment schedule from 2026 onward, and the country still owes about $55bn to the IMF. Yet many investors argue that improved policy traction, low valuations and elevated yields leave room for further upside.
