ValueWalk has just obtained Dan Loeb’s Third Point hedge fund stat sheet for the month of October. The top winner this month, was the fund’s new position in ‘Greek Government Bonds (GGB).’ Earlier, we posted Dan Loeb’s Third Point LLC shareholder letter for the third quarter . Dan Loeb discusses politics, the European crisis, and various holdings of the value oriented hedge fund.
According to Third Point’s latest letter, the year to date return for the fund is 13.8%. For the month of October alone, the event driven, value oriented hedge fund returned an impressive 2.4%. Third Point’s flagship hedge fund currently has $4.87 billion in Assets under management (AUM). The total assets of the firm are currently, $9.6 billion, which appears to be a record high. Both total AUM and AUM for the main flagship hedge fund have increased over the past several months.
Net equity exposure increased from 42% in September, to 44% in October. Loeb’s fund has net credit exposure of 26.7% and ‘other’ at 4.7%. In the macro sector, which Loeb added earlier this year, and has not removed (readers can see the contrast with May’s sheet), net exposure is -7.8%.
With many value investors stating that the macro environment has caused very high correlations (as we also reported at 82% to the S&P 500 according to BAML), some more value oriented investors have begun to use more of a macro approach. Macro consists of Gol, Government, and tail risk (black swan) strategies. Loeb is 13.8% net short Government. We believe that this position is a short on US Government debt, as we explained last month.
The third largest position for Third Point 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 position, as well. We cannot confirm that this is, in fact, a short position, however, looking at the performance of Greek debt over September, it shows that the 10 year yield dropped dramatically and continued the decline in October. Third Point’s investor stat sheet lists Greek bonds as the biggest winning position this month, and third biggest winner last month. Putting the two and two together, it appears that Loeb is long Greek bonds. Kayta Watchel, a hedge fund reporter at Reuters, came to the same conclusion. We do not know when Loeb bought the debt, or what tier.
Loeb also seems to be finding value in Greek equity. According to Marketfolly, Loeb’s fund bought a 45 million euro stake in Dolphin Capital Investors Limited (LON:DCI). Dolphin Capital Investors Limited (LON:DCI) holds a 50% stake in Aristo Developers, which is the largest holiday-home developer in Cyprus (a part of Greece according to every country besides Turkey).
Loeb stated in his shareholder letter, that the firm’s stakes in Greek Bonds, Murphy Oil Corp. (NYSE: MUR), and Apple are about equal in size. Since Murphy closed at $55.90 at the time of the statements, the stakes were about $90 million each, as of last month.
The top five winners this month in descending order are, Greek Government Bonds (GGB), Yahoo! Inc. (NASDAQ:YHOO), Murphy Oil Corporation (NYSE:MUR), American International Group, Inc. (NYSE:AIG), and Dolphin Capital Investors Ltd.
The top five positions of the firm in descending order are, Yahoo! Inc. (NASDAQ:YHOO), American International Group, Inc. (NYSE:AIG), Greek Government Bonds (GGB), Gold, and Murphy Oil Corporation (NYSE:MUR).
Loeb has been pressing for change at Murphy Oil Corporation (NYSE:MUR), as he mentioned in his Q3 letter.