Dan Loeb's Third Point: Top Holdings & Latest Exposures ~ market folly

Thursday, February 2, 2012

Dan Loeb's Third Point: Top Holdings & Latest Exposures

Dan Loeb's hedge fund firm Third Point LLC returned 3.8% in January to start off 2012. Their offshore fund currently manages $4.59 billion and has seen an annualized return of 17.5%.

Third Point's Top Holdings (as of 1/31/12)

1. Yahoo! (YHOO)
2. Gold
3. Eksportfinans ASA
4. Delphi Corp (DLPH)
5. Ally Financial

There are some notable changes to the upper echelon of this hedge fund's portfolio since we last looked. Eksportfinans ASA has emerged as a meaningful position and Ally Financial (the former GMAC entity) has entered their top 5 stakes. Gold and Yahoo remain top holdings and you can see Third Point's bull case for YHOO here.

One former top holding now notably absent from their top positions list is Sara Lee (SLE). While one could assume they still own it given their 'attractive assets' thesis, it's hard to say if they reduced exposure to the name or if they merely added to other positions.

Also worth highlighting: They've held a stake in Delphi post bankruptcy and the company began trading again in the fourth quarter of 2011 with numerous prominent hedge funds as owners. However, one notable holder (Paulson & Co) has apparently reduced its position size substantially.

In terms of attribution, Third Point saw gains from their stakes in Delphi, gold, UniCredit Spa, Technicolor, and Eksportfinans. They lost money last month from positions in Yahoo, and four undisclosed short positions (2 consumer shorts, 1 communications short, and 1 healthcare short).

Third Point's Net Exposure

After spending much of last year with low net exposure to equities (as low as 15% net long), Third Point has slightly ramped exposure back up. They are now 44.8% long and -16.6% short, leaving them 28.2% net long equities. Their largest exposure comes via technology where they are 12.6% net long (most of which is their activist stake in Yahoo).

In credit, Third Point is 15.6% net long the asset class via 9.6% net long exposure to distressed, 8.7% net long exposure to performing, 14.5% net long exposure to asset backed securities (ABS) and -17.2% net short government securities.

Geographically speaking, Loeb's hedge fund is 58% net long the Americas, -4% net short EMEA, and -3% net short Asia.

For thoughts on their portfolio, head to Third Point's Q3 letter. We'll be sure to post up their Q4 letter when it is released.

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