Dan Loeb's Third Point Files Amended 13D on Maguire Properties (MPG) ~ market folly

Tuesday, June 23, 2009

Dan Loeb's Third Point Files Amended 13D on Maguire Properties (MPG)

Our apologies for just now posting this up, but our publishing system has been having issues. For some reason, this post never was published. In an amended 13D filed with the SEC, Dan Loeb's hedge fund Third Point LLC is now showing a 5.02% ownership stake in Maguire Properties (MPG). The filing was made due to activity on May 29th, 2009 and they now are showing ownership of 2,410,000 shares. This is down from their previous position as detailed March 31st, 2009 (as disclosed in their most recent 13F filing). This filing was made because Third Point has ceased to be an owner of more than 5% of the outstanding Common Stock on May 21st, 2009. (And yes, we realize up above it says 5.02%, which is obviously greater than 5%... but we're just copying straight from the SEC filing). And, an interesting fact: this filing has now been amended a total of 8 times... isn't paperwork fun?

As evidenced below, Third Point was selling MPG shares in various orders on April 13th, May 21-22, and May 26-29, in both of their funds and that is what triggered this filing.

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(click to enlarge)

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. As per their April investor update, we saw that they were net long healthcare and utilities, while being heavily net short consumer.

Their Offshore fund was up 7.4% for the month of May and was up 5.4% for the year at that time. We covered Third Point's performance and more in our May hedge fund performance numbers post. Additionally, you can see some of Third Point's market commentary in their Q1 2009 investor letter.

While Gold had previously been Third Point's top holding, we learned in that investor letter that they sold out of their position, as it appears they were merely seeking refuge from the market turmoil and uncertainty. For a current outlook on gold, check out this excellent technical analysis video here. While Loeb may have sold out, there are still a ton of other hedge funds still in the gold trade.

Taken from Google Finance, Maguire Properties is "a self-administered and self-managed real estate investment trust (REIT). The Company is the owner and operator of Class A office properties in the Los Angeles Central Business District (LACBD) and is primarily focused on owning and operating office properties in the high-barrier-to-entry Southern California market."

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