* York to buy stake in Greek construction group

* US firm will also subscribe to a 5-year bond issue

* Move a vote of confidence in Greece's recovery

By Angeliki Koutantou

ATHENS, Nov 4 (Reuters) – U.S investment firm York Capital Management will invest 100 million euros ($134.87 million) in Greece's construction group GEK Terna, acquiring a 10 percent stake in the firm, the two companies said in a joint statement on Monday.

It is the fourth Greek bet by overseas investment funds this year, as twice bailed-out Greece lures investors as it is expected to recover from a six-year recession.

York Capital will acquire a 10 percent stake in GEK Terna by subscribing to the firm's planned share capital increase and another 3 percent stake in GEK Terna's energy unit Terna Energy , the two companies said in a statement.

York Capital will also fully subscribe to a five-year bond issue by GEK Terna at 2.50 euros a share. GEK Terna shares closed at 3.24 euros a share on Friday.

"The investment will contribute to GEK Terna's efforts for ongoing growth and implementation of the group's investment plan and reflects a vote of confidence for the recovery of the Greek economy," the statement said.

York Capital manages about $18 billion of funds, according to the statement.

GEK Terna, one of Greece's biggest construction groups with a project backlog of 3.1 billion euros, has expressed interest to buy Greece's state railways in a possible joint bid with Russia's train monopoly RZD,. Its energy unit Terna Energy runs 1,080 megawatts of installed capacity.

Greece's stock market has gained 30 percent this year, making it one of the world's strongest performers after the country escaped chaotic default and possible exit from the euro zone.

The stock market will be reclassified as an emerging market by MSCI later in the month, attracting investors who are betting on Greece's recovery and are managing funds benchmarked to the index.

Canadian investment fund Fairfax Holdings acquired last month a 5 percent stake in Greek industrial group Mytilineos and committed to raising its holding in property developer Eurobank Properties .

U.S hedge fund Third Point agreed in May to buy a stake in Energean Oil & Gas, a small Greek oil producer, for $60 million.