The investment was made by RAB Special Situations fund, and is understood to have bought 4.8 per cent on Monday and Tuesday, and another 1.4 per cent yesterday (Thursday).
The stake in Northern Rock now accounts for about 4.2 per cent of the $2.3 billion investment portfolio.
The fund manager Philip Richards, told the Times: "If the Bank of England allows Northern Rock to go under or forces it into a fire sale at a derisory price, thatâs an encouragement to the shorts. The shorts will find another target and create an atmosphere of panic if they succeed with this one."
The RAB fund is up by 18 per cent this year, and investors are so far thought to have made 49 times their investment.
But many bankers are surprised by the investment and consider Northern Rock's brand to be beyond repair.
One banker told the newspaper: "I donât see why anyone would want it now. The logic of buying it before was there was some goodwill value, based on the brand. But thatâs all gone now. There is no brand."