Third Point Shows Japan Tobacco Stake, International Paper Now Top 5 Holding

Dan Loeb's Third Point Offshore Fund finished April up 1.4% and is now up 10.5% for the year.  In their latest exposure report, we see a few holdings revealed, including positions in Japan Tobacco (a top winner last month) and Banco do Brasil SA (a top loser last month).  The former has been a large holding at Children's Investment Fund.

The other takeaway from April is that Third Point has listed International Paper (IP) as a top holding.  Loeb's firm outlined their thesis on IP in Third Point's Q1 letter and sized up the position in the first quarter.  But now we get some context as to how big of a position it is since it's now a top 5 holding.

The hedge fund originally started a position in this company in the fourth quarter of 2012 and at the end of December, this position was worth almost $60 million.  Since then, IP has run up from $38 to a high of $49 thus far this year so part of the position size could also be attributed to price appreciation.  We've also highlighted how fellow hedge fund Senator Investment Group added to their IP position as well.


Third Point's Top Positions

1. Yahoo! (YHOO)
2. Virgin Media (VMED)
3. American International Group (AIG)
4. International Paper (IP)
5. Ally Financial (multiple securities held)

Looking at their top holdings compared to last month, gold has fallen out of the list (most likely due to the fact that gold prices have fallen this year).

Third Point's net long equity exposure came in at 45.4% at the end of April.  This is largely unchanged compared to the month prior at 45.1% net long.

Dan Loeb was recently listed among the top 10 highest paid hedge fund managers of 2012.

Third Point Short Japanese Yen, Long Liberty Global & International Paper: Q1 Letter 2013

Dan Loeb's hedge fund Third Point has released its Q1 2013 letter to investors.  In it, we see that Third Point finished the first quarter up 9%.  There were three main takeaways from Third Point's activity: a short position in the Japanese Yen, as well as long positions in Liberty Global (LBTYA) and International Paper (IP).

Liberty Global (LBTYA)

 Loeb's firm bought when shares swooned in Q1 after announcing a takeover of Virgin Media (VMED), a company Third Point also has a large stake in.  Third Point likes the company's impending buyback and sees "Liberty's strategic value as the primary alternative to the incumbent telecom operator's fixed infrastructure in its markets is overlooked." 

Third Point also thinks shares could compound at around 20% per year after closing of the VMED deal.  As of the end of 2012, numerous other hedgies had stakes in LBTYA including Coatue Management, Blue Ridge Capital, Eton Park Capital, and Maverick Capital.


International Paper (IP) 

They like the company's pricing power in North American Containerboard and see numerous catalysts for the company, including finding out whether the industry's price increase has been sanctioned.  We also recently highlighted that Senator Investment Group added to their IP position.


Third Point has also been short the Japanese Yen, in what has been almost a consensus hedge fund trade recently.  You can read the rationale behind their position in Third Point's Q1 2013 investor letter, embedded below:




For more from this hedge fund manager, be sure to also check out Dan Loeb's recommended reading list.

Senator Investment Group Adds To International Paper Position

Alex Klabin and Douglas Silverman's hedge fund Senator Investment Group recently filed a 13G with the SEC regarding shares of International Paper (IP).  Per the filing, Senator has disclosed a 5.2% ownership stake in IP with 23,088,500 shares.  The filing was required due to portfolio activity on March 28th.

This marks a 452% increase in the number of shares they own.  At the end of 2012, Senator owned 4,179,065 shares, but they also owned call options representing 3,500,000 shares as well.

Per Google Finance, International Paper is "a global paper and packaging company, with primary markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. The Company operates in four segments: Industrial Packaging; Printing Papers; Consumer Packaging, and Distribution."

About Senator

Alex Klabin and Doug Silverman founded the hedge fund firm in February 2008 with a focus on global long/short investing in distressed assets and equities. They were originally seeded by Blackstone Strategic Alliance Fund with $150 million and at the end of 2012 reported holdings worth $4.5 billion on their 13F filing (which isn't indicative of their entire AUM total).  Prior to founding Senator, both worked at Jamie Dinan's York Capital.

For more on this hedge fund, we've also posted up Senator's pitch on Rayonier (RYN) as well.

Third Point, Royal Capital, & Monarch Alternative Capital Oppose Smurfit-Stone Takeover

A group of hedge funds including Dan Loeb's Third Point, Royal Capital Management, and Monarch Alternative Capital recently penned a letter to Smurfit-Stone (SSCC) opposing the company's proposed acquisition by Rock-Tenn (RKT). The hedge funds collectively own 9% of SSCC and oppose Rock-Tenn's cash and stock bid that valued SSCC at $38 per share.

Smurfit-Stone recently emerged from bankruptcy and these funds received the majority of their shares through the restructuring process. The various hedge funds are pushing for shareholders to veto the deal. They feel the company can either do better as a standalone company or attract higher offers from Rock-Tenn or others in the packaging industry (such as Temple-Inland (TIN), Packaging Corp of America (PKG), International Paper (IP), MeadWestvaco (MWV), or KapStone Paper (KS)).

We'll have to see if their letter can shake things up and unlock further shareholder value in the stock. Embedded below courtesy of Dealbook is the hedge funds' letter to Smurfit-Stone (email readers visit the site to view it:



As we've detailed before, Third Point likes post-reorg equities and Smurfit-Stone is one of those positions. The hedge fund also has a sizable stake in recently re-listed Lyondell Basell (LYB). And just a few days ago, we highlighted how John Paulson likes restructured equities as well.

TPG-Axon Capital Reduces International Paper (IP) Stake

Dinakar Singh's TPG-Axon Capital Management recently filed an amended 13G with the SEC regarding shares of International Paper (IP). Due to portfolio activity on December 31st, TPG-Axon disclosed a 1.4% ownership stake in IP with 6,300,000 shares.

This marks a decrease in their position as Singh's firm owned 14,270,005 shares back in the third quarter. Over the course of three months, they've decreased their position size by almost 56%.

The hedge fund firm also filed a separate 13G on shares of Zhongpin (HOGS). Based on the filing, it appears as though their position remains unchanged with 3,000,000 shares. This total represents an 8.5% ownership stake in HOGS. We covered when TPG-Axon was buying HOGS back in September. Per Google Finance, Zhongpin is "principally engaged in the meat and food processing and distribution business in the People’s Republic of China (the PRC)."

Singh founded TPG-Axon in 2004 in collaboration with private equity firm Texas Pacific Group. Prior to launching his hedge fund, Singh was co-head of Goldman Sachs' principal strategies group.

International Paper is "a global paper and packaging company. It is complemented by the North American merchant distribution system, with primary markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. The Company operates in six business segments: Industrial Packaging, Printing Papers, Consumer Packaging, Distribution, Forest Products, and Specialty Businesses and Other."

For all other SEC filings, head to our ongoing hedge fund tracking series.