Must-know 3Q updates from Dan Loeb’s Third Point Partners

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Activist investor Dan Loeb’s fund, Third Point Partners LP, disclosed some of the positions traded during 3Q14 in its 3Q investor letter. In this series, we’ll go through the details of these positions and Third Point’s rationale for adding or exiting its stakes.

TP positions

In its 3Q letter, the fund said it “continued to optimize position sizes to increase portfolio concentration, which has been a key focus this year.” The fund stated that it upped its stake in Amgen, Inc. (AMGN), and added a significant new position in eBay Inc (EBAY). The fund also disclosed a “significant direct investment” in Alibaba Group Holding, Ltd (BABA), which launched its U.S. initial public offering, or IPO, in September.

Third Point also highlighted some of its exits or reduced positions, including American International Group Inc (AIG), Hertz Global Holdings, Inc. (HTZ), Softbank Corp (SFTBF), Liquified Natural Gas (LNGLF), and Sony Corp (SNE).

Third quarter update

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Third Point said in its investor letter that the third quarter was “moderately volatile for the markets” and for the fund’s portfolio. It added, “July’s losses offset August’s gains, while September was essentially flat. Equities produced profits, mortgages continued their impressive outperformance, and credit suffered primarily from losses in a single investment, Portugal’s Banco Espirito Santo.”

The fund stated that October saw a “rocky start” for hedge funds with events that have been detailed in the Market Realist series, Hedge fund favorites lead a sell-off in US equities.

The next part of this series will look at Third Point’s position increase and investment thesis for Amgen.

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