market folly

Dan Loeb's Third Point Offshore Fund was up 3.4% in September and is now up 10.9% year-to-date for 2012.  The fund manages $4.7 billion and has seen 17.2% annualized returns.  Takeaways from their latest exposure report are below, including newly disclosed stakes in Greek Government Bonds and Murphy Oil (MUR):


Top Positions As of End of September

1. Yahoo! (YHOO)
2. American International Group (AIG)
3. Gold
4. Apple (AAPL)
4. Murphy Oil (MUR)
4. Greek Government Bonds (GGB)

The last three positions are all noted by Third Point as "positions of approximately equal size."

The main takeaway in this month's exposure report is that Third Point has disclosed a position in Greek Government Bonds.  In the past, we had highlighted how Third Point owned Portuguese bonds.

The hedge fund also revealed a stake in Murphy Oil (MUR). While this is the first time it has been listed on the exposure report, Third Point also filed an amended 13F with the SEC yesterday disclosing that they actually owned MUR in the second quarter.  So this isn't a stake they just went out and bought new in September and that's worth drawing attention to given that MUR has spiked from a low of $44 at the end of Q2 up to almost $56 currently.

AIG is now their 2nd largest holding.  They originally bought AIG in the second quarter, ratcheted up their stake in August, and it appears to have increased (or appreciated over other holdings) in September.  The government has been selling down their stake and institutional buyers have been gobbling shares up.


Net Exposure Levels

In equities, Third Point is now 41.7% net long (73.6% long and -31.9% short), up from 35% net long the month prior.  The hedge fund has slowly and steadily increased net long exposure since the summer sell-off.

In credit, Loeb's firm is net long 30.4%, largely unchanged from months prior.

Geographically, Third Point is net long the Americas at 79% (up from 75%).  The most evident change is they've gone from net short -7% EMEA to net long EMEA 2% over the past two months.  They've also slightly reduced their net short exposure to Asia, going from -10% to -8%.

For more from this hedge fund, check out Third Point's Q2 letter.  Loeb is also featured in the new book from this year: The Alpha Masters, which we recommend reading.