Dan Loeb

Dan Loeb (1961) was raised in Santa Monica, California and had an early fascination with the stock market. He graduated from Columbia University with an economics degree. By his senior year at Columbia, he had made $120.000 in the stock market, but lost it all on an investment in a firm called Puritan-Bennett Inc. The loss taught him an important lesson on over-concentration.

From 1984-1987, Loeb worked at private equity firm Warburg Pincus and after that spent 4 years at record label Island Records where he focused on securing debt financing. As a risk arbitrage analyst at Lafer Equity Investors and later as a senior vice-president in the distressed debt department at Jefferies he developed the basis for his later fund. During his years at Citigroup in charge of high-yield bond sales he fine-tuned his investment acumen and prepared the start of Third Point, launching his first fund in June 1995.

We have been invested with Mr. Loeb for over 10 years and have developed a great admiration for his ability to move the fund’s capital towards those asset classes and sub strategies that offer the best risk-return at any point in time, thereby steering away from problem areas. As an example, post the GFC the fund was largely invested in distressed debt. At the time of establishing the Legends Fund position in Q2 2017, the fund has virtually no credit investments and has been optimally profiting from the buoyant equity markets.

Due to our long standing relationship with Third Point we were able to establish a position for Legends Fund while Third Point remains closed for new investors.

Third Point

Third Point Ultra

Start date
Jun. 1995

Annual return

Annual volatility

>15 bln.
Third Point Ultra performance since inception vs. MSCI World TR AC Index
Third Point is an event-driven, value-oriented hedge fund that invests opportunistically across asset classes including special situation equities, corporate credit, asset -backed securities and macro investments. Mr. Loeb founded the firm in 1995 and has established one of the best track records in the hedge fund industry.

Third Point seeks steady high-yield like returns via corporate and structured credit markets, as well as larger absolute returns via various long/short equity and distressed debt strategies. At times, Mr. Loeb will take an activist role to drive events at his portfolio companies.

The track record of Third Point is second to almost none. Since inception in June 1995 Third Point has achieved annual net returns of 18.9% (up to August 2017). This compares to 9.2% for the S&P 500. Cumulatively, this translates into a 46-fold return over 22 years, whereas a buy-and hold position in the S&P 500 would have resulted in a 7-fold return. And this has been achieved with a 0.4 correlation to US equity markets and a volatility of just 12.6% which also compares favourably to 14.8% of the S&P 500 index. Part of Legend Fund’s exposure is through the Third Point Ultra fund, a leveraged version, which was launched on Jan 1st 1997 and which has an even more remarkable record annualizing at 23.7% (again, up to August 2017). Over the last 5 years (2012- Aug 2017), not the easiest for many hedge fund managers, the fund achieved an annual return of 17% with a volatility of 11%.

Third Point manages USD 16.5 bln (Aug ’17) across its funds and employs 90 people, 35 of whom are investment team members. The firm employs best-in-class service providers and is well aligned with its investors with 7% of the capital being Dan Loeb’s and his team’s.

The Legends