Third Point suffered a sharp setback in April.
The hedge fund firm’s Third Point Offshore Fund lost 3.5 percent for the month, just shy of the 4.1 percent loss suffered by the S&P 500, including dividends. For the year, however, Third Point remains in the black, up 4.8 percent. Meanwhile, it cut the net long exposure in its equity book.
As of the end of April, the multistrategy hedge fund headed by Dan Loeb was 77 percent net long, down from 87 percent the previous month. Most of the change was reflected in the short book; its exposure expanded to –36.2 percent from –19.5 percent at the end of March.
Third Point’s long equity book accounted for virtually all of its April loss as well as for most of the hedge fund’s year-to-date gains. Specifically, Third Point’s April losses were led by two Magnificent Seven holdings: Meta Platforms and Microsoft. The other big losers for the month were retailer and Third Point activist target Bath & Body Works, Advance Auto Parts, and UBS.
Institutional Investor recently reported that Third Point initiated its position in Advance Auto in fourth-quarter 2023, with the company continuing to underperform its peers in what Loeb sees as an attractive industry. Loeb stressed in his first-quarter client letter that the long-term opportunity for the company is fixing its core retail business. He also believes the pending sale of its Worldpac auto parts business should increase shareholder value in the short term.
Over the first four months of the year, however, a different set of companies were the biggest losers, including Pacific Gas & Electric, a longtime Third Point holding; DuPont; an unidentified short position; Humana; and UBS.
The position in asset-backed securities interest rate hedges was Third Point’s biggest winner in April, and the third-biggest contributor to year-to-date gains. Alphabet and Vistra were Nos. 2 and 3 for the month. Vistra was also the biggest winner over the first four months of 2024.
Other top performers for the year’s first four months include Amazon and Alphabet. Heading into May, Third Point’s five biggest positions remain PG&E, Amazon, Microsoft, Bath & Body Works, and Meta.