On Thursday July 30, approximately 50 people from the Hedge Clippers protested outside of New York hedge fund BlueMountain Capital, over the firm's involvement in the Puerto Rican debt crisis.
The progressive group argues that hedge funds have purchased large amounts of Puerto Rican debt at a discount, encouraged Puerto Rico to borrow more and are pushing the island to adopt austerity measures. According to a lengthy report from the Hedge Clippers, hedge funds own over 20% of Puerto Rican debt.
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For the Puerto Rican debt crisis, the Hedge Clippers have classified hedge funds into two groups. The first group is comprised of 35 investors with $4.5 billion in bonds, while the second group represents Puerto Rico Electric Power Authority (PREPA) bondholders.
In total, the Hedge Clippers spotlighted 13 hedge funds in their report that are involved in purchasing Puerto Rican debt.
The Hedge Clippers chose to protest at BlueMountain Capital for its "prominent and aggressive role" in Puerto Rico. BlueMountain holds $400 million in PREPA bonds according to a report from the Hedge Clippers. The group also targeted BlueMountain for hiring lobbyists to combat the Puerto Rico Chapter 9 Uniformity Act of 2015, which would allow Puerto Rico to file for Chapter 9 bankruptcy and restructure its debt.
BlueMountain Capital released this statement regarding the Puerto Rican debt crisis:
"BlueMountain is committed to restructuring PREPA's obligations in a manner that will help the Authority maintain long-term solvency through modernization of its power generation and distribution systems. We believe that this approach is in the best interests of all parties involved, especially the people of Puerto Rico, who will benefit from more efficient and environmentally sound energy production."
Protesters marched down the street and attempted to enter the BlueMountain Capital building, but were blocked by security guards. The group's leaders wanted to request a meeting with a BlueMountain representative and were denied by building security.
The protesters then proceeded to march in circles outside of the building chanting in Spanish and carrying Hedge Clippers signs.
The Hedge Clippers most recently protested outside of Third Point Hedge Fund manager Dan Loeb's Hamptons house two weeks ago during a fundraiser for New York Governor Cuomo. Primarily composed of teachers on that day, the activists were protesting Loeb and Cuomo's support of charter schools.
Renata Pumarol, a spokeswoman for the group, said that the next item on the Hedge Clippers' agenda is calling for corporate tax reforms and for a higher tax on hedge funds. Pumarol also said that the Hedge Clippers currently have a petition with 3,000 signatures that they plan to send to all 13 hedge funds requesting them to stop calling for austerity measures in Puerto Rico.
The Hedge Clippers, founded in February 2015, are a group of activists that aim to expose hedge funds' influence on politics and policy. The group is supported by a Strong Economy for All Coalition, a collection of labor unions and community groups.