* Greek government bonds in top 5 positions for Loeb's fund
* Fund rose 3.4 pct in September, up 10.9 pct YTD
By Katya Wachtel
NEW YORK, Oct 3 Hedge fund manager Daniel Loeb
built a major position in distressed Greek government bonds in
September, according to a monthly report he sent to his
Loeb's nearly $5 billion Third Point Offshore Fund gained
3.4 percent last month, helped by its position in Greek debt,
said the Sept. 30 dated note which was reviewed by Reuters.
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.
The Third Point letter did not disclose 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.
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 eventdriven,
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.
Loeb's other winners in September included Third Point's
largest holding, technology company Yahoo, as well as
bets on gold, Ally Financial and an undisclosed short
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.
Loeb, who is one of the most closely watched hedge fund
managers in the $2 trillion industry, is known as much for his
strong returns as his pointed letters to corporate boards over
The Third Point Offshore Fund has provided investors with
annualized returns of over 17 percent since the fund's inception