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SALT Hedge Fund Trade: Long Portugal, Short Ireland

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AP

One of the more unexpected ideas to emerge from the Skybridge Alternatives investor summit (SALT) has been investing in bonds issued by the government of Portugal.

Portugal, of course, is a founding member of the PIIGS, the nasty acronym for Portugal, Ireland, Italy, Greece and Spain — the countries widely believed to have the biggest debt problems in Europe. (See: Sovereign Credit-Default Swaps)

So why go long Portuguese bonds?

"Portugal is not Greece. It's not Spain. We think it sneaks through this mess," one major hedge fund manager said (speaking on the condition of anonymity).

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