By Michael Northcott Wednesday, 19 December 2012

Someone makes money out of Greece - Shock! Horror!

One of the world's largest hedge funds has become the only known winner in the Greek financial crisis, netting $500m in a bet that the country wouldn't leave the euro.

Hedge funds have been having a rough ride in recent years, especially if they’ve got any exposure to Europe. But bucking the trend is Third Point, a US hedge fund which built up a $1bn position in Greece’s government bonds, and then bet that it wouldn’t leave the eurozone.

The firm’s CEO, billionaire Daniel Loeb, tendered most of the firm’s position on Monday this week during a debt buyback deal by Athens, according to the FT.

As a result, his firm has netted a cool half-a-billion dollars in a heartbeat. That’s probably enough to keep Greece’s schools open for another year, if he's feeling generous...

Loeb, who lives in a $45m penthouse on Central Park West, is one of the most successful hedge fund managers in the US, and has a reputation for sending frank, critical letters publicly to everyone from company board members to the president of the US, if he disagrees with them. He quotes Thucydides and Tupac Shakur to back his forceful arguments.

Third Point started its buy-up of Greek bonds after doing well from a rally in Portuguese debt in early 2012. The firm apparently maintains very close discussions with the Greek government and many politicians.

Incidentally, credit ratings agency Standard & Poor's today announced that it has upgraded Greece's rating six notches out of default, to B-minus. This is still 'junk status', but is the highest rating Greece's debt has had since June 2011. It also got a stable outlook, meaning the rating is not likely to change again soon.

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