Morning Brief: Third Point Posts 3.7 Percent Gain in January

February 05, 2018   Stephen Taub

The hedge fund firm’s flagship fund posted gains in its long portfolio but notched a small loss in its short book.

Dan Loeb’s Third Point Offshore, managed by his hedge fund firm Third Point, posted a strong 3.7 percent gain in January, according to an investor report seen by Alpha. However, that came up short of the Standard & Poor’s 500’s 5.7 percent surge. The multistate firm’s long equity book gained 4.7 percent. But that was offset by a 0.8 percent loss in its short book. The credit book was marginally profitable, however. Heading into February, the fund is 77 percent net long, more or less in line with its position the previous month. Last year the fund returned 18.1 percent.

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Och-Ziff Capital Management apparently wasn’t distracted too much by the turmoil in its executive suite. The multistate manager posted a 3.47 percent gain in its flagship OZ Master Fund. Its OZ Asia Master Fund returned 4.16 percent, while its OZ Europe Master Fund rose 2.73 percent, according to a regulatory filing. The New York firm also said assets under management last month climbed by $1.4 billion, to $33.3 billion, or by about 4.4 percent, in line with the performance gains. Last week the publicly traded hedge fund firm announced that Robert Shafer will succeed Dan Och as chief executive officer, effective February 5. He will also join the board of directors. Ochs will continue to serve as chairman through March 31, 2019.

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Larry Robbins’ Glenview Capital Management has turned up the heat on Tenet Healthcare Corporation. The hedge fund firm, which owns 17.8 percent of the company’s shares, said in a regulatory filing it submitted a proposal ahead of the company’s annual meeting that would amend its bylaws to allow shareholders to take action by written consent without a meeting, including the removal and election of directors. In a regulatory filing, the hedge fund firm says that shareholders of a majority of public companies in Nevada, where Tenet is incorporated, already have this right.

"We believe Action by Written Consent is necessary and appropriate when a company exhibits long-term underperformance operationally as well as financially," Glenview states in its filing. "A chronically unhealthy company is likely to return to health quicker and with more certainty if its owners are allowed more frequent Board oversight, and this is effectively accomplished through the ability to take Action by Written Consent." Glenview, which has been a Tenet shareholder for six years, details a variety of ways that the company has underperformed over a 1, 3, 5, 10, and in some instances 30-year basis.

In response, the healthcare services company said it is reviewing Glenview’s proposal and will make a recommendation to shareholders "in due course." It added that that on January 21, its board amended the bylaws to permit shareholders representing a majority of the shares to call a special meeting.

"These amendments demonstrate Tenet’s continued commitment to strong governance, and provide a clear process for shareholders to decide on company matters that are important to all shareholders," it adds.

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Credit Suisse raised its price target on hedge fund favorite Visa from $129 to $150 and lifted its earnings estimates after the credit card giant reported quarterly earnings and revenues that beat estimates. "The outlook is somewhat better than expected, because of continued strong revenue growth, improving operating leverage and higher EPS than previously expected," the bank tells clients in a research note. At the end of the third quarter, Visa was the sixth-most widely held stock among hedge funds, with at least 192 holders. It was also the most popular stock that is not in the tech or internet industries.


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