UPDATE 1-Investor Daniel Loeb details bullish bet on Japan

Thu May 9, 2013 8:37pm EDT

By Katya Wachtel and Svea Herbst-Bayliss

LAS VEGAS May 9 (Reuters) - Billionaire investor Daniel Loeb will go anywhere for a good trade and he is particularly focused on Japan right now, he told a hedge fund industry conference on Thursday, according to people who heard him speak.

Loeb discussed everything from his bet on Greek and Argentine debt and nutritional supplements company Herbalife , but spent much of the time discussing Japan, these people said. He was speaking as the currency dropped to trade at 100 yen to the dollar, its lowest level in four years.

Reporters were excluded but investment managers and investors flocked to hear Loeb, whose $13 billion Third Point fund has enjoyed double-digit returns in the first four months of the year. The rest of the hedge fund industry limped along at an average 4.6 percent over the same period, while the broader stock market rose 12.7 percent.

While many other funds are wedded to one type of investment or style, Loeb said he is pragmatic and opportunistic, searching the globe for his next best idea.

Loeb has been buying up shares in Japanese companies, which have gained as the country's exports become less expensive thanks to the falling yen.

He praised Japan's Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda for their policies aimed at boosting growth and said Japan's economic recovery is now "in the second inning," according to conference attendees.

Loeb has made money so far this year by betting against the yen as the currency tumbled in response to an expansionary monetary policy.

Other hedge fund managers, including Kyle Bass, David Einhorn and George Soros, have also made money on the Japan trade, people familiar with their portfolios said.

Loeb is one of a handful of prominent hedge fund managers speaking at this year's SkyBridge Alternatives Conference, which attracted some 1,800 managers, investors and service providers to Las Vegas at a time the industry is delivering only middling returns.

During his one-on-one with SkyBridge founder Anthony Scaramucci, Loeb detailed how he had hashed out the contours of the Greek trade on a three-hour bike ride with an analyst, said people who watched the interview.

The biggest risk on the trade "was not being big enough," Loeb said, according to two people who were among hundreds who packed the Bellagio's Grand Ballroom to hear Loeb.

The firm's investment in Greek government bonds was one of its biggest winners in 2012, but that debt was one of the fund's top losing positions in the first quarter of 2013, according to an investor letter reviewed by Reuters.

Another of the fund's big winners during the first quarter was Herbalife. Loeb told the audience in Las Vegas how he was on vacation with his family in Mexico when the stock had "tanked" after another investor, whose name he could not remember just now, said the stock was "dead."

The audience roared with laughter at his veiled reference to hedge fund manager William Ackman who has famously declared the stock will move to zero, attendees said.

Loeb said he thought the stock move was an over-reaction and when Third Point did its own research it decided to invest, deeming the fast-growing company had good cash flow.

Loeb also said there had been a "Jersey Housewife-ification of the hedge fund industry," referencing a TV reality show. Competing views of Herbalife have played out aggressively in public, including a clash on CNBC television between Ackman and investor Carl Icahn, who has taken a favorable view of Herbalife.

So far, both Loeb and Ackman's Pershing Square Capital Management have made money on Herbalife because Ackman bought it at a higher price. Loeb has now exited the position, cashing in on his winnings.

"It was about the investment and not the other stuff which was distracting," Loeb said, according to one person who heard him speak.

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