By Katya Wachtel and Svea Herbst-Bayliss
LAS VEGAS May 9 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
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
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
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