May 4 (Bloomberg) -- Greenlight Capital Inc., the hedge- fund firm run by David Einhorn, added to its holdings of Ford Motor Co. debt in the first quarter and invested in EMC Corp., Harman International Industries Inc. and Pfizer Inc.

The hedge fund bought Ford’s high-yield, high-risk bank loans at an average price of 37 cents on the dollar starting in the fourth quarter of 2008, according to a May 1 letter the New York-based Greenlight sent to investors. The debt rose to 45 cents on the dollar when the first quarter ended, said the letter, a copy of which was obtained by Bloomberg News.

“It does not appear that Ford will need a government loan any time soon, if ever,” the letter said. Ford, the only U.S. automaker to forgo federal aid, “had the foresight to borrow money when the debt markets were accommodating,” the hedge fund said. General Motors Corp. received $15.4 billion in U.S. government loans.

Greenlight, which Einhorn, 40, started in 1996, manages about $5.1 billion in assets. The firm’s Greenlight Capital LP fund gained 4.4 percent in the first quarter, the letter said. The fund lost 23 percent last year.

Mary Beth Grover, a spokeswoman for Greenlight, declined to comment on the letter.

Ford’s debt was one of Greenlight’s five largest disclosed long holdings at the end of the first quarter. The others were Criteria CaixaCorp, the investment-holding company of Spain’s largest bank; gold; Oesterreichische Post AG, Austria’s largest mail service; and URS Corp., the San Francisco-based engineering company, according to the letter.

Lower Debt

Ford, based in Dearborn, Michigan, arranged $23 billion of bank loans in 2006 before credit markets seized up and banks curbed lending. The company cut its debt in April by buying its loans and bonds at a discount to face value.

Ford’s term loans have traded as high as 63 cents on the dollar since the quarter ended, according to Markit, a London- based pricing service. The carmaker’s revolving bank line, which Greenlight also bought, is quoted at 50.8 cents on the dollar, Markit prices show.

Greenlight added “significant long positions” in EMC, the world’s biggest maker of storage computers, Harman International Industries Inc., a Washington-based audio-equipment maker, and Pfizer Inc., the letter said.

Technology Spending

The firm bought shares in EMC, based in Hopkinton, Massachusetts, at an average price of $10.72. The company rose to $12.84 in New York Stock Exchange composite trading today.

“2009 will be an extremely challenging year for all companies exposed to enterprise IT spending,” Greenlight said. “However, we expect EMC to fare better than most given the less volatile nature of storage spending.”

Greenlight bought shares of Pfizer, the world’s largest medicine manufacturer, at an average price of $13.59. The New York-based company, which is acquiring rival Wyeth, rose to $13.98 today.

Pfizer “is attractive both as a stand-alone entity and in a combination” with Wyeth, Greenlight said. Wyeth, based in Madison, New Jersey, will compensate for Pfizer’s declining revenue in the coming years as patents expire on drugs including its Lipitor cholesterol pill, the hedge fund said.

Greenlight sold its investments in companies including Aldar Properties PJSC, Abu Dhabi’s largest real-estate developer; Dr Pepper Snapple Group Inc., the beverage maker spun off by Cadbury Plc last year; and Cablevision Systems Corp.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices and participate substantially in profits from money invested.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net; Pierre Paulden in New York at ppaulden@bloomberg.net

Last Updated: May 4, 2009 16:20 EDT