Dan Loeb’s Third Point is a prototypical activist investor, agitating for changes at huge companies such as Intel, Sony Group and Prudential.
Now his listed investment vehicle is the target of an activist campaign of its own, and while the two sides are at loggerheads, shareholders are enjoying the spoils of the fight.
Third Point Investors Limited, a fund listed on the London Stock Exchange with $1bn in assets under management, invests in a fund managed by the New York-based Third Point. Loeb is the investment manager of the fund, which launched in 2007 and allows investors who might not otherwise be able to get access to his strategy. It holds a grab bag of stocks, bonds and private companies mostly in the Americas and Europe, the Middle East and Africa.
In May, Asset Value Investors, one of the listed fund’s shareholders with a more than 10% stake, began clamouring for changes. The London-based investor, which manages around £1.5bn, equivalent to $2.1bn, said it had significant concerns with the performance of the fund related to the discount at which shares trade to their underlying net asset value. Since its inception, Third Point Investors’ shares have traded at a discount.
The share price, meanwhile, has risen 10% since AVI began publicly airing its grievances in May. The discount at which the shares trade to their underlying net asset value has also shrunk, to 12% from 17%, as of 4 August.
The rise adds to huge gains in the shares over the past 12 months after trading sideways for years. Shares are up 60% above their pre-pandemic level.
The main Third Point fund that the listed vehicle invests in is up 15% as of July 31, having benefited from some of its private tech holdings going public, including Social Finance and SentinelOne.
The board of Third Point Investors announced a plan in April to narrow the discount. It promised to continue share buybacks it began in 2019; target a long-term discount level of no more than 7.5%; increase its allocation to private markets, and extend two tender offers several years from now for a quarter of the fund at a discount of 2% to NAV if the efforts failed.
AVI and other investors felt that didn’t go far enough. Tom Treanor, head of research at AVI, linked up with other shareholders and called for the ability to periodically tender their shares at a price as close as possible to NAV. AVI then requested an extraordinary general meeting to discuss changing the investment policy.
Treanor and another shareholder, Richard Webb, chief executive of London-based Metage Capital, have said their push has buoyed the stock.
The board of Third Point Investors has rejected the suggestions the activists made, saying they would lead to an exodus of investors from the listed vehicle and that the continuing measures would form a consistent policy over a period of years to fix the issues.
Write to Julie Steinberg at [email protected]
This article was published by Dow Jones Newswires