Einhorn's Greenlight fund up 0.3 percent in February: sources

Outspoken hedge fund manager David Einhorn saw his Greenlight Capital gain 0.3 percent in February, according to sources familiar with the number.

The $8-billion hedge fund is up 3.7 percent for the year, lagging the broader stock market which has gained about 6 percent. The benchmark Standard & Poor's 500 stock index advanced 1.1 percent in February.

Einhorn's February results come as the well-known manager has been pushing technology company Apple Inc to return some of its cash stockpile to investors in a form of preferred stock. Greenlight owns roughly 1.3 million shares of Apple, one of the hedge fund's largest positions.

Apple shares have dropped roughly 5 percent since Einhorn went activist on the stock in early February. Einhorn, who added to his hedge fund's Apple holdings in the fourth quarter, filed a lawsuit to block changes in Apple's policy for issuing preferred stock.

A judge sided with Greenlight February 22 on blocking Apple from moving forward with a shareholder vote on a proposal that could have limited the company's ability to issue preferred stock.

On Friday, the fund dropped the lawsuit.

"Apple removed the bundled proposal from the shareholder meeting, therefore resolving the issue," said Greenlight spokesman Jonathan Gasthalter.

Hedge funds reduced their Apple positions by over 30 percent in the fourth quarter, according to a Goldman Sachs Group analysis of fourth-quarter regulatory filings.

American International Group replaced Apple as the hedge fund industry's favorite stock in the three months through December 31.

Daniel Loeb's Third Point was one notable manager that got rid of Apple stock in the fourth quarter, as it tumbled in value.

Third Point's flagship Offshore hedge fund rose 1.3 percent in February, sending yearly returns to 6.1 percent, according to a person with knowledge of the numbers.

Meanwhile, Barry Rosenstein's Jana Partners, which tends to take activist stakes in companies and push for corporate change, lost 0.5 percent in February, but the fund remains up 4.6 percent for the year.

Returns from hedge fund managers for February are expected to trickle in to investors over the next several days. Most hedge funds do not publicly disclose their returns.

(Additional reporting by Svea Herbst-Bayliss; Editing by Matthew Goldstein, Lisa Von Ahn and Bernadette Baum)