Hedge funds lose out on Puerto Rico bets
Hedge funds managed by the likes of Paulson & Company, Lone Star Funds and Blackstone may have lost out heavily in the wake of Hurricane Maria. The funds took positions in Puerto Rican investments and are now facing the impact of the hurricane on the island territory. Several funds have already spoken out about losses with a number of real estate investments, like shopping centres and hotels, unable to open for operation. Holders of Puerto Rican debt, an already heavily distressed asset, are also looking down the barrel of significant losses. 
At the moment, though, those investors are staring at hard-to-quantify red ink.

“We sustained a lot of damage, and we’re facing very significant losses,” said Brian Tenenbaum, regional director for the Morgan Reed Group, which owns or operates several office buildings, commercial buildings and residential complexes on the island.

Samuel Kirschner, chief operating officer with CPG Real Estate, which has been investing in commercial and residential properties in Puerto Rico for nearly 18 years, has struggled to get his properties open because of damage from the storm. After chartering a private plane from Fort Lauderdale, Fla., with canned goods, diapers and batteries, CPG managed to partly open an outdoor shopping plaza in San Juan. The idea was to give residents a place to drink, eat and cool down.

“We’re going to lose a lot of money opening it now,” Mr. Kirschner said.

The Puerto Rico Tourism Company lists at least seven hotels closed with no clear reopening date. About two dozen expect to begin taking reservations before the end of October. Some resorts are said to have suffered little structural damage but severe damage to their beaches and grounds. Tourists might balk at returning to the island anytime soon.

“The turnaround was set back years,” said David Tawil of Maglan Capital, whose firm used to hold Puerto Rican debt.

Even before Hurricane Maria, Puerto Rico’s economy was ailing, with 45 percent of the population living in poverty. In May, Puerto Rico effectively filed the largest-ever federal bankruptcy proceeding by a local government, and much of Wall Street’s attention has focused on the creditors who hold some of Puerto Rico’s $74 billion in public debt.