market folly

Dan Loeb's hedge fund Third Point has released its Q1 2013 letter to investors.  In it, we see that Third Point finished the first quarter up 9%.  There were three main takeaways from Third Point's activity: a short position in the Japanese Yen, as well as long positions in Liberty Global (LBTYA) and International Paper (IP).

Liberty Global (LBTYA)

 Loeb's firm bought when shares swooned in Q1 after announcing a takeover of Virgin Media (VMED), a company Third Point also has a large stake in.  Third Point likes the company's impending buyback and sees "Liberty's strategic value as the primary alternative to the incumbent telecom operator's fixed infrastructure in its markets is overlooked." 

Third Point also thinks shares could compound at around 20% per year after closing of the VMED deal.  As of the end of 2012, numerous other hedgies had stakes in LBTYA including Coatue Management, Blue Ridge Capital, Eton Park Capital, and Maverick Capital.


International Paper (IP) 

They like the company's pricing power in North American Containerboard and see numerous catalysts for the company, including finding out whether the industry's price increase has been sanctioned.  We also recently highlighted that Senator Investment Group added to their IP position.


Third Point has also been short the Japanese Yen, in what has been almost a consensus hedge fund trade recently.  You can read the rationale behind their position in Third Point's Q1 2013 investor letter, embedded below:




For more from this hedge fund manager, be sure to also check out Dan Loeb's recommended reading list.