Hedge fund manager Dan Loeb, who runs the $8.7 billion Third Point fund, just put out his second quarter letter to investors.

The fund is not doing great – it was down 2.3 percent in the second quarter as the S&P 500 was down 2.8 percent, and it’s underperforming the S&P 500 by 5.6 percent year-to-date.

However, Loeb points out one huge bright spot for the fund: Europe.

Here is an excerpt from the letter, which is posted on scribd via ValueWalk:

We are often asked what “event-driven” investing means in today’s environment, and whether that landscape is still fertile. We have found it to be especially so in Europe in 2012, where we have managed to make money despite the continental chaos by looking for negative events, capitalizing on dislocations they generate, and trading well around these individual situations. While Europe overall is a place where we currently have little interest in long-term investing given the circumstances, surprisingly, many of our top winners so far in 2012 are European situations.