The Morning Brief: Third Point’s Loeb Still Bullish on Activism
Third Point’s Daniel Loeb says in his fourth-quarter letter the market “remains favorable” for activist investing — or as he puts it, “constructive engagement with management teams to improve capital allocation, streamline operations, and drive shareholder value” — especially among large-cap companies. The New York-based hedge fund manager, who is known for his activism but is really a multistrategy investor, says that after “a lackluster year” for credit investing, he is starting to see value in energy-related companies “and potential opportunities to reload our portfolio.”
He also devotes a considerable amount of space discussing the political and economic developments in Greece. Loeb also tells clients he lowered his gross and net exposures this year. In 2014, Third Point Offshore rose just 5.7 percent, while Third Point Ultra climbed 6.8 percent, led by shares in biotech giant Amgen. Loeb also singles out one stock he added in the fourth-quarter, Japan-based Fanuc, which he calls the world’s “leading factory automation and robotics” company. “Fanuc is a unique company with a long history of being the best and fastest to market in everything it does,” Loeb writes.
Barry Rosenstein’s Jana Partners unloaded its remaining shares of PetSmart, the pet supply retailer. In December, PetSmart announced that it agreed to be acquired by a group led by European private equity firm BC Partners for $83 per share in cash, less than five months after Jana called on PetSmart to seek a buyer for itself.
Hedge fund investors redeemed $29.1 billion — or 1.2 percent of total hedge fund assets — in December, the largest outflow since April 2009, according to a new report from BarclayHedge and TrimTabs Investment Research. Altogether, $75.3 billion flowed out of hedge funds for the year, compared with $76.4 billion the previous year. Hedge fund industry assets came in at $2.48 trillion in December, down from $2.50 trillion the month before.
Bank activist Lawrence Seidman of Parsippany, New Jersey-based Seidman & Associates, disclosed that he established one new, albeit very small, position in the fourth quarter. He owns $109,000 of National Penn Bancshares, an Allentown, Pennsylvania institution that operates 127 branch offices, including 119 in Pennsylvania, seven in New Jersey and one in Maryland.