Since launching his flagship fund, Third Point, in 1996, activist investor Daniel Loeb has regularly chalked up stellar average annual returns of about 20%. The pandemic looked as if it would put an end to that winning streak – Loeb candidly admits he was “caught flat-footed by the virus”, says CNBC. But he has spent the past quarter rejigging his portfolio and, assuming the current tech-led wobble doesn’t turn into a full-blown rout, may well end the year sitting pretty.
Loeb appears to have set aside his interventionist instincts in favour of a full-blown push into ecommerce and streaming. “He took advantage of jitters around China’s relationship with Hong Kong and the US” to balance an existing large investment in Amazon with a $600m-plus punt on Chinese e-commerce giants Alibaba and JD.com. But the deal that seems to please him most is a $613m investment in Disney made on the back of the media giant’s move into content streaming, which he says is Disney’s “biggest market opportunity ever”.
Putting the fear of God into blue-chips
Loeb is the kind of man who “doesn’t take ‘no’ for an answer well”, says Dealbreaker. Perhaps these new moves will soothe the battering his ego has taken from the failure of a high-profile battle with Sony, which has once again rejected his demands “to blow itself up into a bunch of little Sonys”.
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Over the course of a loquacious career, says the Financial Times, the “sharp-tongued activist” has taken swipes at everyone from Warren Buffett (for the disconnect between what he practises and preaches regarding hedge funds) to his former Columbia university classmate, Barack Obama (for the former president’s “smack downs on hard-working successful Americans known as the 2%”). He has feuded with his former mentor, fellow activist Bill Ackman, sued Sotheby’s, helped oust the boss of Yahoo and put the fear of God into the boards of targeted blue-chips from Dow Chemical and Sony to Nestlé.
Born in Santa Monica in 1961 to a high-powered lawyer and historian, Loeb always had an entrepreneurial streak. At high school he started a skateboard company called “B Industries”. It ran in the family, says Business Insider: his great aunt and uncle founded the toy giant Mattel, thereby earning the distinction of creating the Barbie doll. After reading economics at Columbia, Loeb spent the mid-1980s to mid-1990s cycling through jobs in finance, says the FT: first at Warburg Pincus, and later at Jefferies and Citigroup. In a brief departure from the script, he worked at the record label Island Records before taking the plunge to launch his own fund. Known for his ferocious energy, he once challenged a group of former navy Seals to a triathlon.
Nicely hedged for the next crisis
“In the pantheon of the masters of the universe,” Loeb remains “one of the more colourful.” But he does appear to have toned down his fieriness in favour of a more conciliatory approach. That worked at Nestlé and may well stand him in good stead in his somewhat surprising latest big foray – into the reinsurance sector. Last month, Loeb’s Third Point Re combined with Sweden’s Sirius in a $3.3bn deal. The timing couldn’t be better, says the FT. “A confluence of global miseries is creating a sort of giddy prosperity and hope for the future of the reinsurance world.” Due to the pandemic, “big ticket buyers have no alternative to purchasing expensive cover”. When the next crisis strikes, at least Loeb will be nicely hedged.
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