Daniel Loeb of Third Point has been added into our List of Gurus.
Daniel Seth Loeb is founder of Third Point LLC, a New York based hedge fund managing over $2.3 billion in assets. Loeb is well known in the financial world for writing public letters in which he expresses disapproval of the performance and conduct of other financial executives.
Since incepted in 1996, Daniel Loeb’s Third Point Offshore Fund, Ltd gained an annualized average of 16% until March 2009. The fund returned -17.2% net of fees and expenses in the fourth quarter of 2008 and returned -32.6% for the year ending December 31, 2008. Firm assets under management at January 1, 2009 were $2.3 billion. For the first quarter of 2009, his fund lost 1.5%, while the S&P500 lost 11%.
The performance of his Dec. 31, 2008 static portfolio is shown here:
Apparently he has don very well with his stock picks this year. The outperformances were helped by owning GLD, and successful arbitrage with UST/MO merger and WFC/UST merger
Less than 10% of Third Point's asset goes to shareholder activism.
Read his fourth quarter shareholder report
A Classic Third Point Short Position:
Finally, we have found a classic Third Point short position. Wall Street has developed a consensus view since the downturn started that people are going to need to be retrained, consistent with past recessions. There has been an expectation that the US government will provide funding and subsidies for these educational re-trainings, and so value investors have been piling into for-profit education stocks. These stocks have been trading at historically low valuations recently, as a result of last year’s vacuum in the student lending market. However, we have identified specific companies that we believe are failing in the fundamental task of delivering services of value to their students. It is only a matter of time before the government gets wise to this abuse (money for nothing) and discontinues subsidizing matriculation in these “institutions”, which are really no more than websites. Our resultant short position has already produced profits, but we expect much more in the near to mid-term.
Market Neutral Strategies：Merger Arbitrage
The economy and world markets may be in economic chaos, but we at Third Point are very optimistic about the opportunities we are seeing in two primary areas: market neutral strategies and short selling. We have two merger arbitrage transactions set up for approximately 18% annualized returns.
What can these merger arbitrage transactions be? In his March 2009 report he disclosed one of them is the Wyeth/Pfizer Arbitrage, and the other is Citi Cap. Structure Arbitrage. Apparently he thinks that the risk with these arbitrage is small, and they are positioned for an 18% annualized return.
Short Selling：
We have short positions in European banks and sovereign debt mostly in the form of CDS positions. These investments are an extension of our views on the global banking sector, where we have spent a lot of time during the past twelve months. We continue to believe that banks are hugely overlevered with deteriorating assets, and that Europe is about a year behind the US in confronting this deterioration. The issue becomes even trickier in certain countries where banking sector liabilities make up an even larger percentage of GDP than in the United States. These sovereign balance sheets are comparatively weak and massive bailouts, on the scale required in the United States, won’t be possible.[/i]
In the March 2009 report he listed the short positions:
Short Healthcare A
Short Basic Materials A
Short Consumer A
Short Consumer B
Short Financial A
If you are a Premium Member, and you have set up your personalized list of gurus, Daniel Loeb has not been added to your list. If you are not a Premium Member, we invite you for a 7-day Free Trial Also check out:
Daniel Seth Loeb is founder of Third Point LLC, a New York based hedge fund managing over $2.3 billion in assets. Loeb is well known in the financial world for writing public letters in which he expresses disapproval of the performance and conduct of other financial executives.
Since incepted in 1996, Daniel Loeb’s Third Point Offshore Fund, Ltd gained an annualized average of 16% until March 2009. The fund returned -17.2% net of fees and expenses in the fourth quarter of 2008 and returned -32.6% for the year ending December 31, 2008. Firm assets under management at January 1, 2009 were $2.3 billion. For the first quarter of 2009, his fund lost 1.5%, while the S&P500 lost 11%.
The performance of his Dec. 31, 2008 static portfolio is shown here:
Apparently he has don very well with his stock picks this year. The outperformances were helped by owning GLD, and successful arbitrage with UST/MO merger and WFC/UST merger
Less than 10% of Third Point's asset goes to shareholder activism.
Read his fourth quarter shareholder report
A Classic Third Point Short Position:
Finally, we have found a classic Third Point short position. Wall Street has developed a consensus view since the downturn started that people are going to need to be retrained, consistent with past recessions. There has been an expectation that the US government will provide funding and subsidies for these educational re-trainings, and so value investors have been piling into for-profit education stocks. These stocks have been trading at historically low valuations recently, as a result of last year’s vacuum in the student lending market. However, we have identified specific companies that we believe are failing in the fundamental task of delivering services of value to their students. It is only a matter of time before the government gets wise to this abuse (money for nothing) and discontinues subsidizing matriculation in these “institutions”, which are really no more than websites. Our resultant short position has already produced profits, but we expect much more in the near to mid-term.
Market Neutral Strategies：Merger Arbitrage
The economy and world markets may be in economic chaos, but we at Third Point are very optimistic about the opportunities we are seeing in two primary areas: market neutral strategies and short selling. We have two merger arbitrage transactions set up for approximately 18% annualized returns.
What can these merger arbitrage transactions be? In his March 2009 report he disclosed one of them is the Wyeth/Pfizer Arbitrage, and the other is Citi Cap. Structure Arbitrage. Apparently he thinks that the risk with these arbitrage is small, and they are positioned for an 18% annualized return.
Short Selling：
We have short positions in European banks and sovereign debt mostly in the form of CDS positions. These investments are an extension of our views on the global banking sector, where we have spent a lot of time during the past twelve months. We continue to believe that banks are hugely overlevered with deteriorating assets, and that Europe is about a year behind the US in confronting this deterioration. The issue becomes even trickier in certain countries where banking sector liabilities make up an even larger percentage of GDP than in the United States. These sovereign balance sheets are comparatively weak and massive bailouts, on the scale required in the United States, won’t be possible.[/i]
In the March 2009 report he listed the short positions:
Short Healthcare A
Short Basic Materials A
Short Consumer A
Short Consumer B
Short Financial A
If you are a Premium Member, and you have set up your personalized list of gurus, Daniel Loeb has not been added to your list. If you are not a Premium Member, we invite you for a 7-day Free Trial Also check out:
