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Gramercy bets on beaten-down Chinese property company bonds

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Emerging markets specialist Gramercy, which made big profits a year ago on distressed developer debt in China, has scented an opportunity to repeat the trick and has bought back into the sector.

Robert Koenigsberger, founder of the Greenwich, Connecticut-based investment firm, told the Financial Times that distressed bonds of Chinese developers such as Country Garden, which currently trade at a liquidation price of about 8 cents on the dollar, could triple in value when a restructuring was completed.

“It’s a good time for select names in Chinese real estate. It is 25, 30 per cent of [gross domestic product] and it’s not going to disappear,” said Koenigsberger. “In order for that sector to survive, it is going to need access to financing and the path to…

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