Third Point Investors Ltd reported gains in its Master Fund for the third quarter of 2024 as it acknowledged ‘a positive set-up’ for event driven investing.
In its third quarter investor letter, New York-based Third Point LLC, the investment manager of London-based Third Point Investors Ltd, revealed its flagship fund returned 3.9% for the period, bolstering its year-to-date gains to 14%.
The fund underperformed against both the S&5 500 Index and the MSCI World Index which provided returns of 5.9% and 6.5% respectively.
Its quarterly gains were driven by ‘equity investments in industrials, utilities, materials, and other housing-sensitive sectors, as well as a private position in R2 Semiconductor [Inc]’ according to the firm.
Positive contributors to performance included companies such as Danaher Corp, Pacific Gas & Electric Co and R2 Semiconductors, with Third Point adding that Bath & Body Works Inc, Amazon.com Inc, Advance Auto Parts Inc, Alphabet Inc, and Microsoft Corp all served as drags on the funds performance.
According to the investment manager run by established investor Daniel Loeb, market breadth played a significant role in driving substantial returns with ‘rate sensitive stocks and cyclicals significantly [outperforming] the ’magnificent seven’ as the market shifted its focus to the Fed‘s long-awaited easing cycle.’
Looking ahead, Third Point believes a Republican victory at the upcoming US election on November 5 is likely, expecting it to have a positive impact on ‘certain sectors and the overall market’.
In this instance, the firm said it stands to benefit from an ‘increase domestic manufacturing, infrastructure spending, and prices of certain materials and commodities, and less onerous regulation should unleash productivity and a wave of corporate activity, which Third Point believes will benefit its event-driven positions.’
The firm also drew attention to slowing inflation and a real interest rate ‘that still needs to come down’. These two factors, it contends, combined with its belief that a recession is unlikely, create ‘a positive set-up for event-driven investing, in Third Point’s view.’
Third Point shares were trading up 0.8% at $23.08 on Friday afternoon in London.
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