We have just obtained Dan Loeb’s Third Point hedge fund stat sheet for September, which discloses a new position in ‘Greek Government Bonds (GGB)’ (more on the position below). Earlier, we posted Dan Loeb’s Third Point LLC shareholder letter for the second quarter. Loeb discusses politics, the European crisis, and various holdings of the value oriented hedge fund. Loeb purchased a stake in Kraft Foods Inc. (NASDAQ:KFT) in July and a stake in American International Group, Inc. (NYSE:AIG), in August. According to Third Point’s latest letter, the year to date return for the fund is 10.9%. For August, the fund returned an impressive 3.4%. The flagship hedge fund currently has $4.7 billion in Assets under management (AUM). The total assets of the firm are currently, $9.3 billion, which could be a new record high. Both total AUM and AUM for the main flagship hedge fund has increased over the past several months.
Net equity exposure increased from 35% in August, to 42% in September. Loeb’s fund has net credit exposure of 30% and ‘other’ at -3.3%. What is very interesting is the new category Loeb adds to the stat sheet titled ‘macro.’ This is a new category, which Loeb added earlier this year, and has not removed (readers can see the contrast with May’s sheet).
With value investors increasingly stating that the macro environment has caused very high correlations, some have begun to look more at the macro picture. Macro consists of Gold (net long 6.1%), Government (unclear what the meaning is), and tail risk (black swan) strategies. Loeb is 9.8% net short Government. We are not sure if this means treasuries, Sovereign debt, or credit default swaps. However, Loeb’s top losing position in the prior month is titled ‘Government Short’, we believe that he is short Treasuries. This would also make sense, since treasuries had a solid month overall in July. The fact that Loeb specifically mentioned that the current position is Greek, makes us believe further, that the Government position is USTs.
Top holdings of the fund across asset classes and geography, in descending order:
Yahoo! Inc. (NASDAQ:YHOO). We have written dozens of articles on Dan Loeb’s proxy war with Yahoo! Inc. (NASDAQ:YHOO)., which readers can find here. Loeb is now on the board after winning a successfully proxy battle with management. Yahoo! Inc. (NASDAQ:YHOO) was also the biggest loser of the month, as shares declined over 7% in August.
Apple Inc. (NASDAQ:AAPL). Loeb explains in detail why he is bullish on Apple in his first quarter letter. Apple Inc. (NASDAQ:AAPL) is up over 8% in August.
A position initiated in August, is American International Group, Inc. (NYSE:AIG). This is the second time that American International Group, Inc. (NYSE:AIG) has shown up in Third Point’s holdings. American International Group, Inc. (NYSE:AIG) was also the third biggest winner of the hedge fund in August. The filling does not state whether this is a a long or short position. However, using some basic math we have been able to conclude that this is very LIKELY a long equity position. The second largest winner was Apple Inc. (NASDAQ:AAPL), which was up approximately 12% in August. We know that Loeb has owned Apple Inc. (NASDAQ:AAPL) equity for quite some time. The fourth largest winner is Delphi Automotive PLC (NYSE:DLPH). DLPH equity was up approximately 8% in August. American International Group, Inc. (NYSE:AIG) is the third largest winner for the month of August. The equity was up 8.23%. It seems highly likely that this is therefore a long equity stake in AIG.
Murphy Oil is now the fifth largest position. A 13F filed earlier today, showed that Loeb owns 1.5 million shares of Murphy Oil Corp. (NYSE: MUR).
The six largest position is Greek Government bonds. We do not know with certainty, whether this is a short or long position. Earlier this year, Loeb went long Portuguese Government debt. We believe that the Greek Sovereign debt stake is a long. We cannot confirm that this is in fact a short position, however, looking at the performance of Greek debt the past month, shows that the 10 year yield dropped. Third Point’s investor stat sheet lists Greek bonds as the third biggest winning position. Putting the two and two together, it appears that Loeb is long Greek bonds. We do not know when Loeb bought the debt, or what tier, so we cannot be certain about our statement.
Loeb states that the stakes in Greek Bonds, Murphy Oil Corp. (NYSE: MUR), and Apple are about equal in size. Since Murphy closed at $55.90, the stakes are about $90 million each.
Added in July, Kraft Foods Inc. (NASDAQ:KFT)’s was the fifth largest position in September. The new position in KFT was not disclosed in the second quarter level. The letter does not mention whether the holding is a short or long.
Chesapeake Energy Corporation (NYSE:CHK) has dropped off the list. Loeb did not mention Chesapeake Energy Corporation (NYSE:CHK) in the second quarter letter either. However, according to Third Point’s 13F,, Daniel Loeb owns 2.25% Contingent Convertible Senior Notes Due 2038.
Delphi Automotive PLC (NYSE:DLPH) is another large holding. Loeb owns both the equity and the debt. He detailed his rationale in his second quarterly letter.
Loeb held 13,339,711 shares of Delphi Automotive PLC (NYSE:DLPH) valued at $26.41 equaling approximately 352 million worth of equity. John Paulson is another large holder of both Delphi Automotive debt and stock. Delphi Delphi Automotive PLC (NYSE:DLPH) fell off the top holdings list.
(Disclosure: No positions in any securities mentioned)