Mary McDougall, Investors Chronicle, July 7, 2021
There’s an interesting tussle going on at Third Point Investors (TPOS), where manager and activist investor Daniel Loeb is facing a taste of his own medicine.
Third Point Investors is an investment trust with assets worth £736m which listed on London Stock Exchange (LSEG) in 2007. It invests directly into Third Point’s largest hedge fund which is managed by Loeb in New York and, according to its website, has generated 15 per cent net annualised returns for investors since its inception in 1996.
An enduring frustration for the trust’s shareholders has been its persistently wide discount to net asset value (NAV) over the past three years, more often than not in excess of 20 per cent. As a result, activist investor Asset Value Investors has bought a stake and tried to persuade its board to take steps to narrow the discount.
Asset Value Investors has had some success. Third Point Investors’ board has introduced a discount control mechanism, setting a long-term discount target of no wider than 7.5 per cent and has been buying back shares to move the discount towards the target.
However, James Carthew, head of investment company research at QuotedData, points out that a concession in June which allowed investors to exchange into the master fund at a 7.5 per cent discount was only possible for transactions worth over £10m, so irrelevant to most.
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