A Strong September Doesn’t Help Third Point’s Lagging Performance This Year

The hedge fund headed by Dan Loeb is up almost 16 percent so far in 2024, compared with 22 percent for the benchmark.

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Dan Loeb’s Third Point posted strong results in September. Still, it significantly trails the broader stock market in 2024.

The equity-driven multistrategy firm’s Third Point Investors fund was up 2.9 percent last month, easily beating the S&P 500’s 2.1 percent return, including dividends, according to the hedge fund’s September monthly report, seen by Institutional Investor. Even so, Third Point 3.8 percent third-quarter gain lagged the benchmark by about two percentage points.

For the year, the firm is up 15.6 percent, compared with 22.1 percent for the benchmark. Its performance has been driven primarily by equities, all on the long side. This was especially true last month, when the equities book kicked in 3.8 percent to net gains, offset by a nearly 1 percent detraction from the shorts. Credit added a further 50 basis points to performance.

For the year through September, equities accounted for 8.8 percent of total net gains, driven by the long book, which contributed 17.2 percent. However, shorts wiped out nearly half that gain. Privates and credit kicked in 2.8 and 2.1 percent, respectively, to the fund’s nine-month performance.

Drilling down, the three top performers last month also ranked among the five best performers year-to-date. They are energy company Vistra Corp., Amazon, and Facebook parent Meta Platforms.

The two other top stocks have not previously shown up as major positions or big contributors to performance: entertainment giant Live Nation Entertainment, which became Third Point’s 22nd-largest U.S. long after the firm established a new position in the second quarter, and Danish transport and logistics company DSV, listed on the Nasdaq Copenhagen (so Third Point’s position was not required to be included in the quarterly 13F filing).

Third Point’s top performer for the year is an undisclosed private company. Contract chip maker Taiwan Semiconductor Manufacturing rounds out the top five.

The firm’s biggest losers in September were automotive parts and service retailer Advance Automotive Parts; an undisclosed short position; airplane maker Airbus; American International Group; and Ferguson Enterprises, a distributor of plumbing supplies, PVF, waterworks, and fire and fabrication products.

Heading into the fourth quarter, Third’s Point’s stock portfolio is 75 percent net long, up slightly from the previous month. The five largest equity long positions are the same as the month before: Pacific Gas & Electric; Amazon; life sciences and diagnostics company Danaher; Covestro, a producer of polyurethane and polycarbonate raw materials; and TSMC.