Dan Loeb’s Third Point hedge fund has just released their first quarter letter for 2013. The event driven hedge fund is up 9 percent through March 31st as previously reported. The fund is closed and has $11.7B AUM. Dan Loeb has made money on a mysterious Japanese Macro position, which showed up in previous monthly letters. In the letter just released Dan Loeb discusses his short Japanese Yen position, which is very popular among hedge funds right now.
In the fall of 2012, we recognized as a critical catalyst the increasing likelihood of a transition to leadership by the Liberal Democratic Party, led by Shinz? Abe. In statements leading up to his election as Prime Minister, Abe had articulated reflationary policies dramatically different than the BOJ’s recent initiatives. Accordingly, we established a position speculating that the Japanese currency would be devalued aggressively and equities would rise once Abe took office. We sized the position decisively after concluding the investment had highly asymmetric outcomes.
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Loeb also discusses a new position of Third Point, International Paper. He believes that the company will generate over $2.00 in free cash flow and will increase its dividend.
The top five winners for the quarter were Yahoo! Inc., Japanese Macro, American International Group Inc., (NYSE:AIG) Virgin Media, and Herbalife Ltd. (NYSE:HLF). The HLF position indicates the Loeb still has a large position in the company despite some reports to the contrary. The top five losers for the period were Gold, Short A, Short B, Short C, and Greek Government Bonds.
The full Third Point letter can be found below in Scribd: