S&P Global Update
Another winner in the quarter was S&P Global (SPGI, Financial), an investment we initiated four years ago. The company looks forward to decades of growth supported by increasing global debt issuance, data consumption, and the shift from active to passive investing. Over the past few years, we have watched the market react to multiple debt issuance pullbacks including the oil price shock in 2014, the Brexit panic, China slowdown fears, and, most recently, the COVIDâ19 crisis and, in each case, these dislocations have all proven fleeting and credit markets have come roaring back. This proved true once again in Q2 2020 with record setting issuance across U.S. investment grade and high yield as well as European investment grade, resulting in S&P Global stock rising +35% in the quarter. We believe that cheaper access to liquidity with nearâzero interest rates, a growing refinancing wall in nonâinvestment grade credit, and nascent huge opportunities in China will continue to drive demand for S&P Globalâs essential services. Managementâs stewardship remains excellent, with a focus on cost control, prudent reinvestment, and capital allocation. These elements strengthen our view that S&P Global is a highly defensive, longâterm compounder.
From Daniel Loeb (Trades, Portfolio)'s Third Point second-quarter 2020 investor letter.
