Third Point LLC, the New York-based hedge fund headed by billionaire activist investor Daniel Loeb, bought $150 million of shares in the secondary public offering of Turkey’s biggest real estate company, Emlak Konut GYO, according to two people with knowledge of the transaction.
The purchase is Third Point’s only investment in the Turkish equity market, according to the people, who asked not to be identified because the information isn’t public. That gives the hedge fund a stake of just under five percent, which is the mandatory disclosure limit in Turkey, the people said.
Emlak Konut, which is 49.3 percent owned by the Turkish state housing authority TOKI after the sale, has privileged access to state-owned land, which it auctions to real estate developers for a share in the revenue generated. The company on Oct. 30 reported the equivalent of $169 million in net income in the third quarter, beating the average estimate of $133 million from nine analysts surveyed by Bloomberg.
The shares rose as much as 3.5 percent today before closing 2.8 percent higher at 2.61 liras. The company is rated buy by 13 analysts covering the stock on Bloomberg, hold by eight and sell by one. It was the most-traded stock on the Borsa Istanbul by volume today, with more than 225 million shares traded, according to data compiled by Bloomberg.
Emlak had dropped 8.3 percent to 2.54 liras in Istanbul yesterday, its first day of trading after the company sold 1.3 billion shares at 2.50 liras each in an SPO from Nov. 6 to Nov. 8. The price compared with 2.77 liras at the close on Nov. 1, the last day of trading before the sale.
Foreign institutional investors bought 80 percent of shares in the offering, while domestic institutional and individual investors purchased 10 percent each, according to a filing by brokerage Halk Yatirim with Borsa Istanbul on Nov. 11.
Loeb, who focuses on event-driven investing, buying and selling stocks or bonds of companies going through changes like spinoffs or mergers, said on a conference call Nov. 12 that easy-money policies by central banks in the U.S., Asia and Europe are providing protection for equity investors in the near term. He has engaged with companies including Yahoo! Inc. and Sony Corp. to shift corporate strategies with a goal of driving up share prices.
Loeb’s fund climbed 21 percent last year, boosted by investments in Greek sovereign debt. That compares with an average gain of 1.59 percent by hedge funds in the same period, according to data compiled by Bloomberg.
Turkey’s Borsa Istanbul National 100 index jumped 53 percent in 2012, the second-best performance in the world after Venezuela’s benchmark measure. Emlak rose 60 percent in the year. The stock today pared its year-to-date decline for 2013 to 16 percent, compared with a 5.4 percent drop in Turkey’s gauge.