Third Point LLC

Last Updated: 12/3/2020

Third Point LLC is a Limited Liability Company that started in 1995 and is primarily owned and controlled by Daniel S. Loeb.

Third Point is focused on event-driven, value-oriented investing. Loeb's preferred strategy is said to be buying into trouble companies, replacing inefficient management, and returning the companies to profitability. This popular type of activist investing uses private-equity style techniques to improve company fundamentals to increase shareholder value.

Third Point LLC operates out of an office in New York, NY. Based on the Form ADV filed on 2020-06-18 00:00:00, the investment firm is comprised of 92 employees, only 34 of whom performs investment advisory functions.

Fact Sheet

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Contact

Website:

https://www.thirdpoint.com/

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[email protected]

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Investment Strategy

According to the brochure submitted to IAPD, Third Points investment strategy is as follows:

Macro Strategy. Each Account’s macro investing will consist primarily of investing in global fixed income, currency, commodities and equity markets, and their related derivatives, in order to exploit fundamental, economic, financial and political imbalances that may exist in and among markets throughout the world. The success of the Investment Manager’s macro investing depends on the Investment Manager’s ability to identify and exploit such perceived imbalances. Identification and exploitation of such imbalances involves significant uncertainties. There can be no assurance that the Investment Manager will be able to locate investment opportunities or to exploit such imbalances. In the event that the theses underlying each Account’s positions fail to be borne out in developments expected by the Investment Manager, each Account may incur losses, which could be substantial.

Distressed Securities. The Accounts may purchase securities and other obligations of companies that are in weak financial condition, experiencing poor operating results, having substantial financial needs or negative net worth or facing special competitive or product obsolescence issues or that are involved in bankruptcy or reorganization proceedings, liquidation or other corporate restructuring. Although such purchases may result in significant returns, they involve a substantial degree of risk that can result in substantial or total losses and may not show any return for a considerable period of time (if at all). In fact, many of these securities and investments ordinarily remain unpaid unless and until the company reorganizes and/or emerges from bankruptcy proceedings, and as a result may have to be held for an extended period of time.

The level of analytical sophistication, both financial and legal, necessary for successful investment in companies experiencing significant business and financial distress is unusually high. Among the problems involved in assessing and making investments in troubled issuers is the fact that it frequently may be difficult to obtain information as to the condition of such issuer. These types of investments require active monitoring and may, at times, require participation in bankruptcy or reorganization proceedings by the Accounts and/or the Investment Manager. To the extent that such proceedings arise, the Accounts may have a more active participation in the affairs of the issuer than that assumed generally by an investor. In addition, participation in such proceedings may restrict or limit each Account’s ability to trade certain securities. There is no assurance that the Investment Manager will correctly evaluate the nature and magnitude of the various factors that could affect the prospects for a successful reorganization or similar action. In any reorganization or liquidation proceeding relating to a company in which each Account invests, each Account may lose its entire investment or may be required to accept cash or securities with a value less than each Account’s original investment.

The market prices of the securities of such issuers are also subject to abrupt and erratic market movements and above average price volatility, and the spread between the bid and asked prices of such securities may be greater than normally expected. It may take a number of years for the market prices of such securities to reflect their intrinsic values. In addition, it is anticipated that some of such securities in the portfolio of each Account may not be widely traded, and that each Account’s position in such securities may be substantial in relation to the market for such securities

Fixed Income Securities Generally. The Accounts may invest in fixed income securities. Investment in these securities may offer opportunities for income and capital appreciation, and may also be used for temporary defensive purposes and to maintain liquidity. Fixed income securities are obligations of the issuer to make payments of principal and/or interest on future dates, and include, among other securities: bank debt, bonds, notes, and debentures issued by corporations; debt securities issued or guaranteed by the U.S. government or one of its agencies or instrumentalities or by a non-U.S. government or one of its agencies or instrumentalities; municipal securities; and mortgage-backed and other asset-backed securities. These securities may pay fixed, variable, or floating rates of interest, and may include zero coupon obligations. Fixed income securities are subject to the risk of the issuer’s or a guarantor’s inability to meet principal and interest payments on its obligations (i.e., credit risk) and are subject to price volatility due to factors such as interest rate sensitivity, market perception of the creditworthiness of the issuer, general market liquidity (i.e., market risk), government interference, economic news, and investor sentiment. Each Account’s fixed income investments may be subject to early withdrawal/redemption features, refinancing options, pre-payment options or similar provisions which, in each case, could result in the issuer repaying the principal on an obligation held by each Account earlier than expected. This may happen when there is a decline in interest rates, or when a borrower’s performance allows the refinancing of certain classes of debt with lower cost debt. To the extent such early prepayments increase, they may have a material adverse effect on each Account’s investment objectives and the profits on capital invested in fixed income investments. As with other investments made by the Accounts, there may not be a liquid market for any of the debt instruments in which each Account invests, which may limit each Account’s ability to sell these debt instruments or to obtain the desired price. The Accounts may also purchase loans as participations from certain financial institutions and each Account may be subject to the credit risk of the selling financial institution as well as that of the underlying borrower.

The Accounts may attempt to take advantage of undervalued fixed income securities or relative mispricings in disrupted credit markets. The identification of attractive investment opportunities in disrupted credit markets is difficult and involves a significant degree of uncertainty. During periods of “credit squeezes” or “flights to quality,” the market for fixed income investments can become substantially reduced. This poses a particular risk that leveraged credit instrument positions held by each Account may need to be sold at discounts to fair value in order to meet margin calls. At the same time, the dealers may correspondingly reduce the value of outstanding positions, resulting in additional margin calls as loan to value triggers are hit under prime brokerage and swap agreements.

Corporate Bonds. The Accounts may invest in corporate bonds. Corporate bonds are subject to the risk of the issuer’s inability to meet principal and interest payments on the obligation and may also be subject to price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity. When interest rates decline, the value of each Account’s corporate bonds can be expected to rise, and when interest rates rise, the value of those securities can be expected to decline. Bonds with longer maturities tend to be more sensitive to interest rate movements than those with shorter maturities. Many such bonds are unsecured, which makes them less likely to be fully repaid in the event of a bankruptcy.

High Yield Securities. The Accounts may invest in “high yield” debt and preferred securities which are rated in the lower rating categories by the various credit rating agencies (or in comparable non-rated securities). Securities in the lower rating categories are subject to greater risk of loss of principal and interest than higher-rated securities and are generally considered to be predominately speculative with respect to the issuer’s capacity to pay interest and repay principal. They are also generally considered to be subject to greater risk than securities with higher ratings in the case of deterioration of general economic conditions. Because investors generally perceive that there are greater risks associated with lower-rated securities, the yields and prices of such securities may tend to fluctuate more than those of higher-rated securities. The market for lower-rated securities is thinner and less active than that for higher-rated securities, which can adversely affect the prices at which these securities can be sold and could result in the Accounts being unable to sell such securities for an extended period of time. In addition, adverse publicity and investor perceptions about lower rated securities, whether or not based on fundamental analysis, may be a contributing factor in a decrease in the value and liquidity of such lower-rated securities.

Bank Loans. The Accounts may invest in loans and loan participations originated by banks and other financial institutions. These investments may include highly-leveraged loans to borrowers with below investment grade credit ratings. Such loans are typically private corporate secured loans that are negotiated by one or more commercial banks or financial institutions and syndicated among a group of commercial banks and financial institutions. In order to induce the lenders to extend credit and to offer a favorable interest rate, the borrower (whose equity may be publicly-traded) often provides the lenders with extensive information about its business that is not generally available to the public. To the extent that Third Point obtains such information and it is material and nonpublic, each Account may be unable to trade in the other securities of the borrower until the information is disclosed to the public or otherwise ceases to be material, nonpublic information. A failure by an Account to advance requested funds to a borrower could result in claims against an Account and in possible assertions of offsets against amounts previously lent. Depending on the way in which an Account acquires its interest in a bank loan, it may be exposed to credit risks of both the borrower and the institution which sold an Account its interest in the loan. Also, bank loan transfers typically require consent of the issuer and agent bank, so the settlement period is longer and creates increased credit and counterparty risk.

Mortgage and Other Asset-Backed Securities. The Accounts may invest in mortgage-backed securities and other asset-backed securities, whose investment characteristics differ from corporate debt securities. Among the major differences are that interest and principal payments are made more frequently, usually monthly, and that principal may be prepaid at any time because the underlying mortgage loans or other assets generally may be prepaid at any time. Mortgage-backed securities and asset-backed securities may also be subject to call risk and extension risk. For example, because homeowners have the option to prepay their mortgages, the duration of a security backed by home mortgages can either shorten (i.e., call risk) or lengthen (i.e., extension risk). In general, if interest rates on new mortgage loans fall sufficiently below the interest rates on existing outstanding mortgage loans, the rate of prepayment would be expected to increase. Conversely, if mortgage loan interest rates rise above the interest rates on existing outstanding mortgage loans, the rate of prepayment would be expected to decrease. In either case, a change in the prepayment rate can result in losses to investors. If an Account purchases securities that are subordinated to other interests in the same mortgage pool, such Account may only receive payments after the pool’s obligations to other investors have been satisfied. Each Account may from time to time invest in structures commonly known as “ReREMICS,” in which case it will purchase an interest in a trust that owns mortgage-backed securities. ReREMICS issue senior and junior tranches and each Account usually buys the junior, subordinated tranche. An unexpectedly high rate of default on mortgages in the mortgage pools serving as collateral for each Account’s securities may limit substantially the applicable pool’s ability to make payments to each Account as a holder of securities, which may reduce the value of those securities or render them worthless.

Methods of Analysis

In addition, Third Points methods of analysis include:

None

Top 10 Holdings from Form 13F

Reporting Period: 09/30/2020

Issuer	Share	Value(1000s)
PG&E CORP	84,935,257	797,542
ALIBABA GROUP HLDG LTD	2,525,000	742,300
DISNEY WALT CO	5,300,000	657,624
DANAHER CORPORATION	3,000,000	645,990
AMAZON COM INC	205,000	645,490
IAA INC	10,535,000	548,557
FIDELITY NATL INFORMATION SV	3,200,000	471,072
CHARTER COMMUNICATIONS INC N	750,000	468,255
SALESFORCE COM INC	1,425,000	358,131
JD.COM INC	4,450,000	345,364

Historical 13F Filings

EdgeGiant has compiled all 13F filings since Q2 2013 for your convenience. You can view historical portfolio position forThird Point LLCin our 13F section HERE.

To get the comprehensive list of holdings that fall under 13F regulatory guidelines, check out our write up on how to access and use 13Fs in your personal investment decisions.