By Svea Herbst-Bayliss
BOSTON, Oct 16 (Reuters) - Daniel Loeb's Third Point hedge fund is profitable again, helped by credit investments, private investments and more diversified stock picks, the investor said on Friday.
The Third Point Offshore Fund gained 3.6% during the first nine months of 2020, Loeb wrote in a letter seen by Reuters. The letter highlighted an 11.7% increase during the third quarter that helped wipe away a first quarter loss of 16%.
During the three months that ended on Sept. 30, Third Point focused more on "quality businesses with robust end markets, sustainable growth, technological edge, impenetrable market positions, strong cultures, and opportunities to reinvest capital at high rates of return," the letter said.
Winners include Alibaba Group Holding Ltd, IAA Inc, and Danaher Corp, as well as a private investment in cybersecurity startup SentinelOne.
Prudential Plc, where Third Point has pushed for change, ranked as a loser but Loeb remains optimistic that gains lie ahead as the insurer sells off its U.S. variable life business.
In the credit sector, Third Point owns securities in airlines and aerospace industry and is "excited" about natural gas.
Hertz ABS is one of its larger recent structured credit investments, which benefited as the car rental company sold portions of its fleet as auto factories closed amid the pandemic.
Third Point also reported gains in SentinelOne, which it expects to go public in 12 to 18 months. Third Point owns roughly 10% of the company.
Loeb, who founded Third Point a quarter-century ago, also hired eight investment professionals after taking back the reins as sole chief investment officer in May.
As the world evolves, Loeb wrote, "we must ask ourselves if we wish to engage at the leading edge of this change or end up as roadkill on what was once quaintly called 'the information superhighway.'" (Reporting by Svea Herbst-Bayliss)