Dan Loeb and Third Point are some of the most active investors and that’s one of the reasons why their moves should be watched closely. However, while the information we get from the SEC filings reveals only a small percentage of what Third Point actually does, the quarterly letters to investors give us a larger perspective.
Yesterday, we discussed already a sequence from Loeb’s latest investor letter, which refers to the fourth quarter of last year. In that particular sequence the investor discussed its position in The Dow Chemical Company (NYSE:DOW), which represents its largest current investment of Third Point.
Aside from The Dow Chemical Company, another holding that is mentioned by Loeb in the letter is Ally Financial Inc (NYSE:GMA.CL), in which Third Point became one the largest investors after acquiring around 9.5% of the company in the second half of 2013.
“Divesting $30 billion of assets on four continents and resolving a highly complex bankruptcy of a subsidiary are only the beginning of the story from this team, and we expect them to execute on their multi-year plan to significantly increase Ally’s earnings,” Loeb says in the letter.
In addition, Third Point also discusses its holdings in Sony Corporation (ADR) (NYSE:SNE), Softbank Corp (USA) (OTCMKTS:SFTBF) and T-Mobile US Inc (NYSE:TMUS), which represents the fund’s core investments and are expected to deliver a significant value during 2014.
Overall, Third Point managed to deliver steady returns across its portfolio. The fund gained 26% during 2013, out of which the largest increase has been contributed by equities: 18%, followed by corporate and structured credit which added 3% each.
“We generated meaningful alpha in Technology, Media and Telecom investments, European equities, performing credit, and U.S. residential mortgage-backed securities. While overall performance was solid, there were certain areas where we could have done better. The Japan portfolio disappointed later in the year as Sony underperformed the broader market, and we missed a number of event-driven opportunities in the Health Care sector,” the letter added.
The full text of Third Point Investor Letter for the fourth quarter of 2013, can be accessed through the link below: