Franklin Templeton investment puts government debt in spotlight

The news that the giant global investment manager Franklin Templeton is the biggest holder of Irish government debt outside of the IMF and EU has put the economy in a spotlight before a series of crucial ECB/EU meetings.

It was reported by the Financial Times that the chief investment officer at Franklin Templeton, Michael Hasenstab, has built up a €4bn position on Irish government debt.

But Mr Hasenstab has already made a sizeable profit on his punt on Irish government debt. When his Franklin Templeton fund started buying 2-year Irish government paper in Jul 2011, yields had soared to 20%. Yields on 2-year debt are now at 2.5%. The lower the yield on a bond, the higher the price.