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Bailey McCann, Opalesque New York:

Dromeus Capital Group, the firm behind one of the leading Greece focused hedge funds has turned cautious on Greek investments raising its cash balances for the first time since its inception. The fund was launched in October 2012, and returned 40% last year on the idea that Greek assets were underpriced. Now, fund principals say that it may be time to ease up, making reference to the overall economic situation in the region, and the approach of European leaders.

The fund is focused on acquiring distressed corporate bonds and steeply discounted equities, which paid off last year. But, as the Cyprus situation unfolds and an era of austerity driven contraction defines the region, moving back into cash may be the safer choice.

"Greek asset prices have been through a tremendous rally over the last three quarters but future prospects increasingly depend on budget execution and output recovery and we have doubts on both," says Achilles Risvas, Managing Partner at Dromeus Capital.

The firm notes that markets have been too ready to celebrate the progress on the fiscal front, taking at face value the official forecasts. The Financial Times has some charts from Dromeus highlighting their doubts. EU leaders have forecas......................

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