Dan Loeb’s Offshore Fund returned 3.9% after fees during the first half of 2012. Our calculations showed that Dan Loeb’s long stock picks actually under performed the market significantly so far this year. During the first half Third Point’s large-cap stock picks gained 6.8%, far less than the S&P 500 index. During the second quarter Third Point’s large-cap stock picks lost 7.7%, far more than the S&P 500 index (see the details). Overall, Dan Loeb’s large-cap stock picks lost 1.4% during the first half of 2012. So how did he actually return 3.9%?
Third Point combines several strategies under its roof. In May, Third Point Offshore Fund’s equity positions amounted to 44% of its assets. The fund had a 13% short position. His short positions probably lost more than his long positions during the first half. Third Point also has a large credit exposure and employ other strategies. See the table below showing long, short, and net exposures:
Overall, Dan Loeb was a bad stock picker during the first half but his other strategies performed much better than his stock picks.