U.S. billionaire Dan Loeb is not afraid of risk. Loeb and his Third Point fund have proven time and time again that the best time to buy an asset is when everyone else says it is worthless. Loeb’s half a billion dollars in profits from his 2012 investment in Greek bonds is one recent example of his make your bets when there’s blood in the streets strategy, and, he’s doing it again in Greece.
More on the Third Point Hellas Direct deal
Knowledgeable sources are reporting that Loeb is using his relatively new Greek investment-focused Hellenic Recovery Fund to buy a 20% stake in Greek online auto insurer Hellas Direct. The stake is said to be worth around $5.75 million.
Of note, the deal is the only investment made by an international fund into Greece so far year as fears of a Grexit has potential investors holding off on deals.
The online car insurance business raised more than $20 million from investors in a primary fundraising and around $12 million in a second fundraising, when a few early backers cashed in on their investment. Hellas Direct has also raised over $10 million of angel financing from a combination of family offices and “contrarian investors”.
The business was established four years ago by former Goldman Sachs bankers Emilios Markou and Alexis Pantazis.
Pantazis commented that despite worries that Greece might have to default on its debts and leave the eurozone, Hellas Direct was attractive as an investment because it was counter-cyclical and because drivers were required by Greek law to carry insurance.
Hellas Direct said it will use the funds raised by selling the stake to Loeb to pursue acquisitions in the currently very active sector.
Statement from Hellas DIrect co-founder
Hellas Direct’s Pantazis noted: “Third Point is well positioned to look past the political problems and understand the investment rationale and we are thrilled to have them as partners in our business.”
In his fourth quarter letter, Loeb discussed the situation in Greece – evaluating whether the country would really leave the Euro.