Saturday, 30 August 2014
Last updated 1 day ago
Oct 8 2012 | 11:49am ET
The Greek debt crisis may once have looked like an impending global catastrophe—but it isn't anymore, according to Dan Loeb, and his investors are profiting from that fact.
Loeb's Third Point has built up its holdings of Greek debt to such an extent that they are now among the hedge fund's top five holdings, Reuters reports. Third Point also more broadly increased its holdings of European credit in July and August, and it's paid off: Third Point's $5 billion flagship Offshore Fund rose 3.4% in September and is up 10.9% this year.
European Central Bank chief Mario Draghi's "campaign to save the euro began in late July, and reinforced our belief that the probability of a Greek default was probably overstated by the market," Loeb wrote in his quarterly letter to investors. He said the fund had bought up some Greek bonds for an average of 17 cents on the dollar. The bonds are now trading higher.
Loeb quoted the later rapper Tupac Shakur's "Keep Ya Heads Up" in the letter, noting that Shakur said he was "tryin' to make a dolla outta 15 cents."
"While we may not have achieved the over six-fold return that Mr. Shakur (Tupac) earned plying his trade, we believe the potential risk-adjusted return on [Greek bonds] is more favorable, particularly when adjusted for the risk of potential regulatory intervention he faced," Loeb wrote.
Loeb added that, in addition to Greek debt, Third Point profited from its bets on Ally Financial, gold and Yahoo!, while losing on American International Group and Enphase Energy.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...