Hedge funds are converging on Venezuela’s $150‑$170 billion of unpaid claims, betting that a post‑Maduro, sanctions‑relaxed environment will finally unlock a long‑stalled debt restructuring. The surge in buying activity follows the dramatic capture of President Nicolás Maduro on 5 January 2026, which lifted sovereign and PDVSA bond prices by roughly ten points and signalled a possible shift in U.S. sanctions policy. Funds such as Broad Reach, Winterbrook Capital, Canaima Capital and Gramercy have already amassed positions worth 30‑35 cents on the dollar, a sharp rise from the 20‑25 cents they held a year ago, positioning themselves to reap the upside from a restructuring that analysts expect to deliver 40‑50 cents per dollar of face value.

The total pool of claims that hedge funds are targeting extends far beyond the $60 billion of defaulted sovereign and PDVSA bonds that fell into arrears after Venezuela’s December 2017 default. Accrued interest, arbitration awards and bilateral loan balances have swollen the liability to roughly $150‑$170 billion, depending on how past‑due interest and court judgments are counted. Unsecured euro‑bonds alone amount to $56.5 billion of principal, and when past‑due interest is added the bond‑holder claims rise to $98.3 billion – about 119 % of the country’s IMF‑projected 2025 GDP.

Analysts outline a restructuring blueprint that would cut the principal by 50 % and replace the old notes with a 20‑year new bond plus a 10‑year zero‑coupon instrument to cover missed interest since 2017. The market currently assumes Venezuela will ultimately pay just 22 % of what is owed on the notes, with an average recovery of 182 cents per $1 of face value and an expected eventual restructuring payout of 80 cents. Hedge funds are buying the distressed securities at deep discounts – 20‑30 cents on the dollar – in anticipation that a Treasury licence will be granted once sanctions are eased, allowing the swap to proceed.

The legal landscape adds further complexity. More than 200 separate arbitration and court claims, involving U.S., Chinese and Russian investors, remain pending. Hedge‑fund‑backed claim collectors are actively pursuing these awards, seeking to incorporate interest‑plus‑penalties into any settlement. The United States’ sanctions, first imposed in 2017‑2018 and briefly relaxed in 2023 before being re‑imposed in 2024, have been the principal barrier to any restructuring that involves U.S. investors or PDVSA oil revenues. A Treasury licence would therefore be a prerequisite for a comprehensive deal, heightening the urgency of the current “hunt”.

An IMF‑anchored programme is widely regarded as the only credible path to a sustainable solution. The proposed restructuring would need to bring Venezuela’s debt‑to‑GDP ratio down from an estimated 175 % to around 85 %, a reduction that would only be feasible with a coordinated IMF fiscal framework. While Venezuela has not undergone an IMF annual consultation for nearly two decades, analysts argue that a post‑Maduro government could be more amenable to such an arrangement, especially if it wishes to restore access to international capital markets.

In short, the hedge‑fund activity is not a speculative fling but a calculated bet on the convergence of political change, sanctions relief and a structured IMF‑backed debt workout. By positioning themselves now, these funds aim to capture a sizeable slice of the $150‑$170 billion claim pool that has lingered in limbo since the 2017 default, turning a decades‑old financial quagmire into a potential source of profit.

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