Dan Loeb Bets Big on Greek Dept and Wins

Dan Loeb, activist hedge fund manager, built a major position in distressed Greek government bonds.  His nearly $5 billion hedge fund  Third Point Offshore Fund gained 3.4 percent last month, helped by its position in Greek debt.

Dan Loeb

Dan Loeb, activist hedge fund manager, built a major position in distressed Greek government bonds.  Dan Loeb, 50, also played a key role in getting Yahoo’s board to hire a big name, Marissa Mayer, as its new chief executive. His hedge fund  Third Point Offshore Fund gained 3.4 percent last month, helped by its position in Greek debt.
The holding of Greek government bonds, which ranks in size with the firm’s stakes in Apple Inc and Murphy Oil Corp , appears to be a long position given the robust rebound in that country’s debt over the past month.
Greek debt has risen in value as concern about the collapse of the euro zone has eased a bit following steps by the European Central Bank to prop-up some nations’ ailing economies.
Dan Loeb did not disclose in Third Point newsletter any of the maturity dates of the Greek bonds it had purchased. But the total return on 10-year Greek government bonds in September was 29 percent. In the third quarter, those bonds gained 53 percent.  If the manager goes long a bond or a stock, he believes the value of those securities will rise.
Dan Loeb has already had success this year with bets on the sovereign debt of another stressed European nation: Portugal. Investments in that country’s government bonds were one of Third Point’s biggest winners in the second quarter, the New York-based firm told clients in a quarterly note it sent at the end of July.
In that letter the $9.3 billion hedge fund had told investors “we anticipate Europe’s dysfunctional capital markets to continue generating a steady stream of similar event driven, attractive ideas for us to incorporate into our portfolio.”
The Third Point Offshore Fund is now up almost 11 percent for the year through the end of last month, while most hedge funds rose just over 3 percent through Sept. 26, according to Bank of America Merrill Lynch. The broader stock market rose 2.5 percent last month, and has risen 16.4 percent for the year.
Dan Loeb’s other winners in September included Third Point’s largest holding, technology company Yahoo, as well as bets on gold.  Dan Loeb,50, also played a key role in getting Yahoo’s board to hire a big name, Marissa Mayer, as its new chief executive.
Losing bets for Third Point during September were American International Group, Enphase Energy Inc, two short positions in technology, media or telecommunications companies and an asset-backed-security short position, according to the note.

Read More:  Reuters

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