Third Point, the New York-based hedge fund run by billionaire Dan Loeb, has made $500m profit from a bet placed on Greek bonds just a few months ago.
Despite the crisis, Third Point's Dan Loeb bet that Greek debt was undervalued. Photo: AP
7:00AM GMT 19 Dec 2012
Mr Loeb has reportedly sold a large part of a $1bn position in Greek debt that
soared in value in the wake of the buy-back deal unveiled by Athens on
Monday.
The trade will stand out as one of the most audacious bets on the eurozone
debt crisis so far. Since its onslaught in 2009, the turmoil has
wrong-footed financiers around the world.
It also affirms Mr Loeb’s position as one of the most successful hedge fund
managers, particularly since the rest of his high-rolling industry has
struggled to make returns all year.
The former Citibank trader, who according to Forbes is worth $1.3bn, set up
Third Point in 1995. The group, which has around $10bn under management,
made a name for being a ruthlessly active manager. Since its inception,
Third Point has generated returns of about 25pc a year, far outperforming
global indices.
Mr Loeb, 51, who has boasted that he owns two of New York state’s most
expensive properties, including a $45m Manhattan apartment, has said his key
skill is being able to identify mispriced assets.
He became particularly renowned for writing strongly-worded letters to the management of companies in which he owned stakes. In recent years he has shifted the firm’s focus away from activism to investing in a range of different assets, such as sovereign debt.
He is thought to have starting building his position in Greek debt when the bonds were trading at just 17
cents on the euro. According to traders, Mr Loeb became the biggest hedge fund holder of Greek debt.
In the latest buy-back, Athens swapped holdings of its own debt for notes issue by a Brussels rescue mechanism at 34 cents on the euro.
Source
He became particularly renowned for writing strongly-worded letters to the management of companies in which he owned stakes. In recent years he has shifted the firm’s focus away from activism to investing in a range of different assets, such as sovereign debt.
He is thought to have starting building his position in Greek debt when the bonds were trading at just 17
cents on the euro. According to traders, Mr Loeb became the biggest hedge fund holder of Greek debt.
In the latest buy-back, Athens swapped holdings of its own debt for notes issue by a Brussels rescue mechanism at 34 cents on the euro.
Source
