Dan Loeb's Third Point: AIG Now a Top Holding (August Exposure Report) ~ market folly

Monday, September 10, 2012

Dan Loeb's Third Point: AIG Now a Top Holding (August Exposure Report)

Dan Loeb's Third Point Offshore Fund was up 1.8% for August and 7.3% year-to-date at that time.  Now managing almost $4.7 billion, Third Point's August exposure report reveals that American International Group (AIG) is now one of their top five holdings.

Third Point's Top Holdings

1. Yahoo! (YHOO)
2. Gold
3. Apple (AAPL)
4. American International Group (AIG)
5. Kraft Foods (KFT)

The government has just announced that they will be selling $18 billion worth of their AIG stake, of which AIG will buyback $5 billion.  This sale will allow the government to become a minority owner.  We've analyzed the AIG situation in the brand new issue of our premium newsletter if you want to read why hedge funds have been buying.

Third Point joins the likes of Blue Ridge Capital, Tiger Management, and Fairholme Capital as owners of AIG.  Loeb originally started a stake in AIG recently in the second quarter.  However, it appears as though they've ratcheted up their position recently.

Their position in Kraft Foods was started in the past few months as well, as they're likely playing the impending spin-off catalyst there.

Third Point's Equity Exposure

At the end of August, the hedge fund was 70.6% long, -35.3% short, leaving them net long equities to the tune of 35.3%.  Their net exposure is largely unchanged from the month of July, though they've slightly increased gross exposure.  Their largest sector exposure continues to be Tech Media & Telecom (largely via their YHOO and AAPL stakes).

In credit, Third Point is net long 30.9%, with their largest exposure coming via asset backed securities.  This is only a slight increase from the month prior.

Geographically, Third Point is net long the Americas 75%, net short EMEA -7% and net short Asia -10%.  Month over month, this means Third Point was increased its short in EMEA and increased its long exposure to the Americas.

For more on this hedge fund, we've also posted up Third Point's Q2 letter.

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