Daniel Loeb's Hedge Fund Third Point LLC: 13F Filing Q4 2008 ~ market folly

Wednesday, April 22, 2009

Daniel Loeb's Hedge Fund Third Point LLC: 13F Filing Q4 2008

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up, we have Daniel Loeb's Third Point LLC. Third Point is a $2 billion activist and value based hedge fund. Specifically, they deem themselves to be "event driven, value oriented investors." Loeb founded the firm back in 1995 with $3.3 million in seed capital and is still running the show these days. While Third Point is technically an activist fund, Loeb often has numerous passive investments as well. Loeb himself is quite well known for his searing and critical letters to management of various companies. Third Point has seen annual returns averaging over 15% since inception (including the crazy year that was 2008), a Sharpe Ratio of 0.9, and a correlation to the S&P500 of 0.4. In terms of recent portfolio performance, Third Point was -3% for March, and -1.44% year to date as of then, according to our list of March hedge fund numbers. As per their recent April investor update, we saw that they were net long healthcare and utilities, while being heavily net short consumer.

If you want a more historical perspective on Third Point's portfolio, you can check out their holdings from Q3 2008, the quarter prior to the positions detailed below. We track these funds on a quarter by quarter basis to establish their longer-term moves. Slight disclaimer: Third Point has been pretty active with 13D & 13G filings in the time period that has elapsed from this filing to the present. As such, certain positions in their portfolio have been updated and we will be covering all of those more recent moves in another post tomorrow, to distinguish the moves from the list of their entire portfolio below.

The following were their long equity, note, and options holdings as of December 31st, 2008 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.

Some New Positions (Brand new positions that they initiated in the last quarter):
Gold (GLD)
Wachovia (WB)
Liberty Acquisition (LIA)
Potash (POT)
Trian Acquisition (TUX)
Triplecrown (TCW)
Sapphire Industrials (FYR)
Global Brands (GQN)
Guaranty Financial (GFG)
Global Consumer (GHC)
Hicks Acquisition (TOH)
LifeTime Fitness (LTM)

Some Increased Positions (A few positions they already owned but added shares to)
PHH (PHH): Increased by 160%
UST (UST)): Increased by 60%

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Vanguard Natural Resources (VNR): Reduced by 65%
Rohm & Haas (ROH): Reduced by 64%
CoreMark Holding (CORE): Reduced by 37%
Telephone & Data (TDS): Reduced by 32%
Energy XXI (EXXI): Reduced by 32%
Teradata (TDC): Reduced by 30%
Txco Resources (TXCO): Reduced by 27%
Victory Acquisitions (VRY-WS): Reduced by 24%
Maguire Properties (MPG): Reduced by 23%
Phoenix Companies (PNX): Reduced by 22%
Dineequity (DIN): Reduced by 20%
Epicor Software (EPIC): Reduced by 18%

Removed Positions (Positions they sold out of completely)
Dr Pepper Snapple (DPS)
Plains Exploration (PXP)
Lorillard (LO)
Leap Wireless (LEAP)
Time Warner (TWX)
Tibco (TIBX)
Anheuser Busch (BUD)
American Eagle Outfitters (AEO)
Liberty Acquisition (LIA-U)
Thompson Creek (TC)
Orient Express Hotels (OEH)
Meadwestvaco (MWV)
CVS Caremark (CVS)
Hewlett Packard (HPQ)
Covidien (COV)
Target (TGT)
Flow (FLOW)
Enpro (NPO)
Verigy (VRGY)
GLG Partners (GLG)
Global brands (GQN-U)
Global Consumer (GHC-U)
Trian Acquisition (TUX-U)
Augusta (AZC)
Vantage Energy (VTG)
Heckmann (HEK-WS)
OSI Systems (OSIS)
Heckmann (HEK)
Emcore (EMKR)

Top 15 Holdings (by % of portfolio)

  1. SPDR Gold Trust (GLD): 9.73% of portfolio
  2. Wachovia (WB): 8.66% of portfolio
  3. PHH Corp (PHH): 8.29% of portfolio
  4. Exco Resources (XCO): 8.15% of portfolio
  5. Liberty Acquisition Holdings (LIA): 7.2% of portfolio
  6. Potash (POT): 5.5% of portfolio
  7. Teradata (TDC): 5.2% of portfolio
  8. SPDR S&P 500 (SPY): 5.17% of portfolio
  9. Telephone & Data Systems (TDS): 3.8% of portfolio
  10. UST (UST): 3.5% of portfolio
  11. Victory Acquisition (VRY): 3.17% of portfolio
  12. Trian Acquisition (TUX): 3% of portfolio
  13. Nabi Biopharma (NABI): 2.9% of portfolio
  14. Phoenix Companies (PNX): 2.9% of portfolio
  15. Triplecrown (RCW): 2.7% of portfolio

Like so many other hedge funds, Third Point's top holding is Gold (via GLD), and they brought it on as a new holding last quarter. As you can tell, Third Point's portfolio is slightly more concentrated than many other hedge funds, with a large percentage of their portfolio in their top 6 or 7 holdings. Some of their notable sales include Dr Pepper, Plains Exporation, and Lorillard, all which were at one point greater than a 4.5% position for Third Point; they no longer own those names. We would like to make special note of the current list of Third Point's holdings seen above. Since filing this 13F, they have been busy filing various 13D's and 13G's with the SEC, detailing changes to some of their positions. As such, we will cover these more recent moves in a separate post to which we can compare the holdings. Assets from the collective long US equity, options, and note holdings were $1.7 billion last quarter and were $799 million this quarter. This is just one of many funds in our hedge fund portfolio tracking series in which we're tracking 35+ prominent funds. We've already covered:

We cover a new hedge fund each day and you can see the complete list of hedge fund portfolios here.

blog comments powered by Disqus