Rush to Invest in Venezuela Is ‘Nuts,’ $15 Billion Advisor Says

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The sudden interest in investing in Venezuela following the impeachment of Nicolas Maduro is “ridiculous” and meaningful opportunities will not arise until democracy and the rule of law are restored, according to the CEO of CV Advisors.

“Everyone and their mother is calling their financial advisor, calling their family office and saying ‘where do we invest? How do we leverage this? You’re from Venezuela, can you look for assets there?'” Elliot Dornbusch said in an interview. “I said, ‘Are you crazy?’ I ask.

In a letter to investors seen by Bloomberg on Tuesday, Dornbusch wrote that the U.S. government’s promise to remove Maduro and work with remaining elements of the Venezuelan regime while encouraging investment in the oil industry will not work or help deliver greater prosperity for the country. “Political transition must come first,” he wrote.

Dornbusch grew up in Venezuela and studied economics, including the oil industry, before starting a construction company. He left the Hugo Chavez administration in 2003 after overhauling state energy company Petroleos de Venezuela SA and has lived in the US ever since, founding CV Advisors in 2009. Headquartered in Aventura, Florida, the firm works with 135 families and institutions and manages $15 billion in assets.

“The crisis in central Venezuela is deep and systemic. It cannot be resolved simply by removing a single leader or toppling a single figure in the regime,” he wrote. “It is unrealistic to expect transformational change while leaving in place the thousands of people who enable, benefit from and perpetuate this corruption.”

Since the shocking detention of Maduro and his wife at a military base in Caracas early Saturday, the Trump administration has vowed to work with acting president Delcy Rodriguez, Maduro’s vice president, to jump-start the country’s crippled oil industry and tap into the world’s largest reserves. This has raised questions about how to potentially invest in geopolitical change, from defaulted bonds to potential private equity, ETF or real estate plays.

“You cannot take advantage of this situation. You cannot go to Venezuela and invest because you have no long-term freedom, no democracy, no rule of law,” he said.

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