HispanicBusiness

The fund's holdings must meet two basic tests: Companies have to do well even if there's no lifting of the embargo, and if trade ensues, companies need to do additional business. Currently, approximately half of the companies are in the U.S. with the rest in the Caribbean basin.

His biggest investment is Florida East Coast Industries. He also cites cruise lines Carnival and Royal Caribbean as companies that also have everything to gain from an open Cuba – mainly more options for customers.

What's more, Mr. Herzfeld says the firm is planning a second fund, initially coined The Cuba Fund, which won't launch until the embargo situation changes. While he wouldn't give details, and no prospectus exists, it's going to be larger than his existing fund to capitalize on all of the new businesses that could be created in a democratic Cuba.

"It's not unreasonable to believe many stocks in our portfolio will rally [if trade with Cuba ensues]," says Mr. Herzfeld. "We'll take some of those profits and look at ventures to invest with Cuban Americans."

U.S. RESISTANCE

The Helms-Burton Act of 1996 is the biggest hurdle for businesses looking to crack the Cuban market. The law stipulates that Cuban democracy is a necessary element to any trade relationship between the U.S. and Cuba. The law's reach is wide – Helms-Burton is the legislation the Sanchez-Hills are using to bludgeon Grupo Sol Meliá, and the United States has long tried to warn off any foreign investors sniffing around confiscated properties.

And, although both the House and Senate have voted in recent years to overturn a ban an American travel to Cuba and to allow the sale of American goods to Cuba, President George W. Bush is maintaining a hard line toward the regime. In June, he suspended operations of three major remittance agencies – La Perla del Caribe, Transeair Travel and Uno Remittance Inc. – to stifle the flow of hard currency into the struggling island.

In July, the administration's Commission for Assistance to a Free Cuba issued a report that pledged an additional $80 million to support Cuban opposition to the regime as well as to push for a free media. The multi-agency commission, co-chaired by Secretary of State Condoleezza Rice and Havana-born U.S. Commerce Secretary Carlos Gutierrez, recommended initiating assistance to Cuba after a transition government took over. Under current U.S. law that government cannot include Raul Castro.

Meanwhile, some are starting to fear the U.S. is dallying while global competitors from places like China and Venezuela are stealing a march on the Cuban market.

REAPING WHAT WE GROW

One of them is Rep. Solomon Ortiz (D-TX), who for years backed the trade embargo. Now, fresh from a July trip to Cuba to scope out trade opportunities for his district's port of Corpus Christi, he recalls Mr. Castro asking, "You are members of Congress. Why do you do business with China and Russia, but you don't do business with me, and I'm only 30 minutes away?"

The congressman agrees on some levels, asking rhetorically, "Why are we out of the ballgame?

"There's a lot that Cuba needs to do with their regime, but when you see what deals they're making. … God forbid they decide to block the Gulf of Mexico."

Of course, the congressman has reason to worry about that. Corpus Christi and 16 other Gulf ports are interested in increasing trade with Cuba (the current agreement allows for the U.S. sale of agricultural goods and medicine).