Fund Research

Third Point Offshore

Last update 18 February 2019

Third Point Offshore is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

To provide its shareholders with consistent long term capital appreciation through investment of all of Third Point Offshore Investors Limited's ("Company") capital (net of short term working capital requirements) in the Third Point Class N Shares of the Third Point Offshore Fund, Ltd ("Master Fund"). The Master Fund’s investment objective is to seek to generate consistent long-term capital appreciation by using an event driven, bottom up, fundamental approach to evaluate securities in potential underlying investee companies.

As at:

15/02/2019

Group/Investment

Third Point Offshore USD Ord

Ticker

TPOU

Manager Name

Daniel S. Loeb;Brad Radoff;Brigitte M. Roberts;Jeff Perry;Jim Carruthers;Munib Islam;Neel Devani;Rob Schwartz;Timothy S. Lash;

Association of Investment Companies (AIC) Sector

Hedge Funds

12 Mo Yield

0.0%

Dividend Distribution Frequency

Annually

Latest Market Capitalisation

£519,009,729

Latest Net Gearing (Cum Fair)

0%

Latest Ongoing Charge Ex Perf Fee

2.97%

Turnover Ratio

4.1%

Shares Outstanding

 46,629,306

(Discount)/ Premium (Cum Fair)

-19.5%

Daily Closing Price

1087.086p

Third Point Offshore Investors Limited (TPOIL) is a £645m Guernsey registered, London-listed investment company that is a closed-end feeder fund into the Third Point Offshore Fund, Ltd. (the “Master Fund”). Third Point describe themselves as “opportunistic multi-asset investors”. They are best known for their event driven, value-oriented approach, which the management team apply opportunistically and dynamically across asset classes. Daniel S. Loeb is the portfolio manager who oversees all investment activity and is supported by a lean investment team of approximately 30.

The majority of the fund’s assets are currently invested in long and short equities positions, but it also has exposure to corporate and sovereign credit, asset-backed securities, venture investments, risk arbitrage, and macroeconomic events. The manager blends bottom-up security selection with macroeconomic insights layered on top, aiming to deliver strong risk-adjusted returns over the longer term. Daniel is not restricted by region or asset class, allocating in a flexible manner, and is happy to take concentrated positions in his best ideas (currently the largest is Baxter International at c 13% of NAV). Whilst combining a variety of strategies, one of the largest contributors to alpha generation since inception has been through taking an activist/constructivist approach, often involving interaction with company management to enact corporate change and unlock value.

Performance over 2018 did not matched the strong long-term performance of the strategy, which has annualised at almost double that of US equity markets since inception in 1995, with significantly lower volatility and drawdowns. Over the long term, the strategy aims to deliver mid-to-high teens annualised returns, but with an “awareness of risk” and a flexibility that aims to mitigate drawdowns. After a flat period of performance over the nine months to September 2018, Third Point had a poor Q4, with the NAV falling by ~12% over this period. January 2019 has seen a strong start with positive NAV performance of +2.9%. Third Point has added several resources and refocused on core investment strategies to be better positioned for NAV performance in 2019 and thereafter.

The discount on TPOIL has been persistent since 2015, which has prompted the board to undertake a number of initiatives to try to close the discount, by making the vehicle more attractive to UK investors. The company achieved a premium listing on the LSE on 10th September 2018, meaning that TPOIL was eligible for inclusion in the FTSE indices at the year-end rebalance. In addition, the company has started buying shares back and has also announced a reduced management fee, down from 2% per annum to 1.25%. In addition, the fund carries a modified high watermark provision relating to the performance fee. As such, the Company will bear a 10% performance fee on all gains in the Master Fund until the Master Fund’s returns increase by approximately 30% since 31 December 2018. The fund also issued a new website in 2018 (www.thirdpointoffshore.com) which includes the ability for shareholders to register for emailed updates on performance, portfolio changes, corporate developments, etc. Further, the board enacted a new share buyback programme in Q4 to help combat the discount.

William Heathcoat Amory

Important information

Third Point Offshore is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Kepler Trust Intelligence is a website owned and managed by Kepler Partners LLP. Material produced by Kepler Trust Intelligence should be considered a marketing communication, and is not independent research.

This report has been issued by Kepler Partners LLP for communication only to eligible counterparties and professional clients as defined by the Financial Conduct Authority.  Its contents are not directed at, are not to be communicated to, may not be suitable for and must not be relied on by retail clients

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This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules. 

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Fund History: Third Point Offshore

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