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The Morning Brief: Loeb’s Third Point Finishes Year With Loss

Daniel Loeb’s Third Point Offshore finished 2015 in negative territory. The hedge fund, managed by the New York firm of the same name, lost about 1 percent in December and about 1.2 percent for the year. Third Point Offshore had been up 5.7 percent through July. But the fund suffered from the market’s subsequent selloff and overall volatility, dropping 5.2 percent in August and 4.5 percent in September.


William Ackman’s Pershing Square Capital Management sold a little more than 5 million shares of Valeant Pharmaceuticals International just before year-end, reducing its stake to 8.5 percent from 9.9 percent, according to a regulatory filing. All of the shares were sold by the New York firm’s two onshore partnerships in order to generate a tax loss for the firm’s investors, who comprise all of the investors of Pershing Square and Pershing Square II. Its two offshore funds did not sell any shares of the embattled drug company.


Two more hedge fund firms said they are returning all or most of their outside money to clients. Doug Hirsch’s Seneca Capital Investments is returning most of its roughly $500 million from its event-driven fund, according to a Bloomberg report citing a letter sent by the New York firm to clients. Hirsch, who founded his firm in 1996, posted a 6 percent loss in his domestic fund last year. “I am no longer able to continue making the commitment and sacrifices required to run outside capital,” he reportedly said in a letter dated December 21 and reported on by Bloomberg. “Despite negligible redemption requests and increasing market opportunities that are the result of a challenging year in event-driven investing, I cannot in good faith start next year with the dedication required to manage your capital.” Hirsch, one of the founders of the Sohn Investment Conference, plans to continue investing his own money through his firm. Meanwhile, Scott Bommer’s SAB Capital Management is returning all of its investors’ money by sometime in January after 17 years of operation, according to a separate Bloomberg article. The New York event-driven firm, founded in 1998, posted a 10.5 percent decline in its SAB Overseas Fund through August 2015, the last date for which performance data is available. The fund lost 3.6 percent in 2014 after posting two consecutive annual gains in the low 20 percent range, according to the hedge fund database published by HSBC.


Shares of Etsy fell 2.60 percent on the final day of trading, dropping to its all-time closing low of $8.26. The Brooklyn, New York-based online retailer geared toward arts-and-crafts makers went public at $16 last April and closed at $30 on its first day of trading. It topped out at $35.74. Chase Coleman’s Tiger Global Management is one of the largest investors in the company through a variety of private and public investments. The New York firm owned nearly 9 percent of the public stock at the end of the third quarter.

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