Third Point has a new major stock position.
The multistrategy hedge fund firm headed by Dan Loeb disclosed in its August monthly report that Covestro, a German producer of polyurethane and polycarbonate raw materials, is now its fourth-largest equity long.
It is not known whether the position is in American depositary receipts traded on the OTC market in the U.S. or in stock traded on the Frankfurt Stock Exchange. If the former, this is definitely a new position for Third Point, which did not report holding the shares as of the end of June, according to the firm’s second-quarter 13F filing. The stock is up slightly since the end of June and 17 percent since early June.
Covestro replaced Taiwan Semiconductor Manufacturing Corp. among the five largest equity longs since the end of July, according to Third Point. Institutional Investor earlier reported that July was the first time the firm listed TSMC as a top-five holding in its monthly reports.
Third Point’s four other top holdings at the end of August remained the same: California utility Pacific Gas and Electric, e-commerce giant Amazon, diversified life sciences and diagnostics company Danaher, and cloud computing giant Microsoft.
In August, the hedge fund firm also reduced its net long exposure to 72 percent from 87.5 percent the previous month. Most of the difference was reflected in the long exposure, which was cut to 109.6 percent from 129.5 percent.
Third Point gained 1 percent in August, boosting its full-year return to 12.1 percent, according to the monthly report. This compares with 2.4 percent and 19.5 percent for the S&P 500 for the same two periods, respectively.
Just two of the firm’s top-five holdings played any role in the August results — one positive, one negative. PG&E was the second-biggest winner for the month, and Amazon was the biggest loser. Third Point’s biggest winner in August and for the year was an undisclosed private company, per the monthly report. Interestingly, no private company was a top-five performer during any previous month this year, the reports reveal.
Third Point’s three other top performers last month were London Stock Exchange Group, movie theater chain Cinemark Holdings and energy company Vistra Corp., which until August had been the best performer virtually all year.
The hedge fund firm’s five biggest losers for the year are retailers Bath & Body Works and Advance Auto Parts, Swiss commodities trading and mining company Glencore, chemicals giant DuPont, and an undisclosed short position.
Altogether, equities accounted for 6.9 percent of the 12.1 percent year-to-date gain, mostly driven by a 15.4 percent contribution from the long portfolio of the fundamental and event-driven book. Privates kicked in 4.6 percent to full-year gains, and credit accounted for 1.8 percent.
In August, privates were the star of the show, contributing 3.6 percent to the monthly increase, whereas equities detracted by 2.5 percentage points.