David Einhorn's Greenlight Capital has added to an existing stake in Greece's Alpha Bank, making Alpha one of the hedge fund's top five holdings.
Greenlight Capital Re, a reinsurance company that invests in a portfolio managed by Einhorn, included Alpha Bank among its top five positions as of Feb. 28, according to its website. Greenlight Capital Re's money is invested in a separate fund, but the investments are intended to reflect the allocations in Einhorn's main hedge fund. A spokesman for Greenlight Capital declined to comment on the investment.
The position in Alpha could be worth several hundred million dollars or more, based on Greenlight Capital's regulatory filing dated Dec. 31. At that time, the fifth-largest position was Cigna, with a value of $368 million. Other big positions at the time included a $1.3 billion stake in Apple and a $697 million investment in General Motors.
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Greenlight's moves come after other hedge funds including Daniel Loeb's Third Point have made successful bets on Greece. Third Point invested in Greek government debt when it traded at depressed levels and the market has gradually recovered. Greek government bond yields have settled below 10 percent after shooting above 30 percent at the height of the country's debt crisis.
Alpha Bank currently trades at 0.72 euros a share, up from a low of 0.25 euros last April. The stock has also had a good start to 2014, rising 15 percent.
Greenlight took the initial position sometime during the second quarter of 2013 when the stock was near its lows. At the time, Greenlight participated in recapitalization of Alpha Bank and Piraeus Bank, according to an investor letter. The hedge fund didn't specify how large the initial investment was, but said it included warrants that would allow it to buy more shares over a period of 4½ years.
In the letter last year, Greenlight said the bank should be able to cut costs over time as employment laws are revised and that business confidence was on the rise. It also said that Alpha was valued between 0.5 and 0.6 times tangible book value.
Alpha Bank's shares have fallen by about 95 percent since their peak in 2007.
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—By CNBC's John Jannarone. Follow him on Twitter @jannarone