The geopolitical landscape in Venezuela has shifted dramatically following a U.S. ground attack that led to the ousting of President Nicolas Maduro. As the country grapples with uncertainty, some investors are already eyeing potential lucrative ventures in a nation that has largely remained closed to international business for years.
Charles Myers, chairman of Signum Global Advisors, expressed optimism about Venezuela’s prospects, hinting at a potential $500 billion opportunity over the next decade. Speaking on CNBC’s “Squawk on the Street,” Myers mentioned, “This is a major infrastructure play… I think people are being far too pessimistic. This is a massive opportunity across multiple sectors.” He is currently organizing a trip to Venezuela for a group of investors, multinationals, and asset managers set for March, which he confirmed is being arranged independently from the U.S. State Department.
However, not all experts share Myers’ bullish outlook. Following Maduro’s capture, President Donald Trump stated that the U.S. would take the reins in Venezuela, hinting at significant consequences for Acting President Delcy Rodriguez if she opposed U.S. actions. While Rodriguez initially resisted Trump’s comments, recent statements suggest she may be open to collaboration with the new U.S. administration.
The immediate implications for business in Venezuela remain complex. Robert Koenigsberger, managing partner of Gramercy Funds Management, pointed out that the existing regulations and investment environment have not yet changed. “An investor can’t simply just fly to Caracas… and start knocking on doors,” he stated, highlighting the presence of numerous sanctioned individuals within the country.
Myers acknowledged that foreign investment will hinge on security guarantees, though he noted the reassuring presence of U.S. military forces off the Venezuelan coast. While he admitted that current sanctions are a barrier, he expressed hope for their eventual lifting, which could pave the way for a revitalization of the Venezuelan economy, including a possible return to the debt capital markets and reinvigoration of the Caracas Stock Exchange.
In the immediate aftermath of Maduro’s ousting, oil and gas companies seem to stand to gain the most. Notably, Chevron, the only U.S. company still operating in Venezuela, saw a 5% increase in its stock price after the news, making it the biggest gainer in the Dow Jones Industrial Average. Trump has called on major U.S. oil companies to invest heavily in rebuilding Venezuela’s oil infrastructure, despite past barriers that have kept many firms out since former President Hugo Chavez seized U.S. assets in 2007.
Yet, Myers emphasized that opportunities aren’t limited to the oil and gas sector. He highlighted interest from firms involved in construction, automotive, defense, chemical, and mining industries. Additionally, representatives from hedge funds, long-only investors, and sovereign wealth funds are expected to participate in the planned trip.
Reflecting on past experiences, Myers compares the current situation in Venezuela to the transitions experienced by Eastern Germany in the 90s, rather than drawing parallels to Middle Eastern conflicts. Earlier trips he organized included visits to conflict-ridden countries like Syria and Ukraine, indicating a pattern in his approach to emerging investment opportunities, even in unstable environments.
As investors prepare to explore Venezuela’s potential, the combination of geopolitical unpredictability and market opportunity is sure to keep attention focused on this South American nation in the coming months.
