Third Point, the New York based hedge fund managed by billionaire investor Dan Loeb made a profit of $500 million from his bet on Greek bonds. Earlier in October, we first broke the news that Dan Loeb initiated a position in Greek bonds, as Loeb reported in his September shareholder letter. The Greek debt position was also one of the best performers for the fund over the past few months.

Dan Loeb

Billionaire investor, Dan Loeb of Third Point made $500 million in returns after selling a large chunk of his $1 billion position in Greek bonds, according to a report from Sam Jones of The Financial Times.

Third Point was one of the few hedge funds that made an audacious bet in the euro zone sovereign debt crisis that enhanced profits in just a few months. The report cited that Third Point has the largest position in Greek bonds among the hedge funds who invested in the region. The Greek bond is Third Point’s third largest position in its portfolio.

According to the Financial Times, Third Point purchased its holdings in Greek bonds for only 17 cents in the Euro earlier this year. The Greek government traded bonds of its own debt for notes issued by the European region’s rescue facilities for 34 cents on the euro.

He did not sell his entire position in the Greek bonds though, primarily because he believed that its value would still increase by 40 percent. On Tuesday, the Standard & Poor’s raised its rating of the Greece’s sovereign debt due to the government’s determination to remain part of the euro currency.

Aside from Greek bonds, Third Point also found opportunities in Greek equities as well. The hedge fund purchased shares of Dolphin Capital Investors Limited (LON:DCI) with an estimated market value of 45 million euro. Dolphin Capital Investors Limited (LON:DCI) owns a 50% stake in Aristo Developers, the largest holiday-home developer in Cyprus (a part of Greece according to every country besides Turkey).

Based on the latest letter of Third Point to its investors, the hedge fund generated 13.8 percent returns year-to-date. The hedge fund delivered 2.4 percent return for the month of October alone. Currently Third Point has $9.6 billion in various assets. Its flagship fund has $4.87 billion in assets currently under management.

Aside from Greek bonds, the hedge fund’s biggest positions include Yahoo! Inc. (NASDAQ:YHOO), American International Group, Inc. (NYSE:AIG), Gold, and Murphy Oil Corporation (NYSE:MUR).