Third Point, LLC is a large hedge fund manager with its headquarters located in Hudson Yards, New York City. The firm has nearly $26 billion in client assets under management (AUM) spread across multiple pooled investment vehicles, which are also known as funds. The firm's funds are managed by a team of 34 investment advisory professionals, though the firm also employs more than twice as many employees who perform other functions and help the firm run on a day-to-day basis.
Not everyone has the ability to invest in a hedge fund, as they're exclusive to accredited investors. A local financial advisor can help you gain access to investment strategies that are similar to those of hedge funds, though.
Third Point Background
Third Point was founded over 25 years ago in 1995. It was established as a Delaware corporation and has been in business as a Securities and Exchange Commission (SEC)-registered investment advisor since 2006. Daniel S. Loeb is the principal owner of the firm, as well as its CEO and founder. He is also a member of the firm's executive team, along with Josh Targoff, partner and COO, and Ian Wallace, partner. The firm also has a reinsurance affiliate and a London-listed closed-end fund. It employs one strategy across all of its funds, except for the firm's fund of funds vehicle and its Structured Credit Fund.
Third Point Investment Philosophy
As noted before, Third Point uses the same investment strategy and philosophy for nealy all of its funds. The strategy can be described as event-driven and value-oriented, incorporating a wide variety of different investments and asset classes across a range of geographical locations and markets. In short, almost no investment is off the table for consideration by Third Point.
Third Point invests in several different ways, using tactics such as leverage and short sales. Specific types of securities, some of which are considered riskier, include derivatives, futures, swaps and options. The firm describes its common macro strategy as investing in global fixed-income, currency, commodities, equity markets and related derivatives. It does this in order to best take advantage of fundamental, economic, financial and political imbalances that inevitably exist in global markets. The firm reserves the right to amend its central strategy for certain accounts.
When it comes to informing its investment decisions, the firm takes an analytical approach .while also utilizing fundamental methods of analysis. It gleans information from a variety of sources, both internal and external.
Largest Hedge Funds Managed by Third Point
Third Point Offshore Master Fund LP
- AUM: $10,330,781,649
- Minimum: $10,000,000
- Beneficial Owners: 885
Third Point Ultra Master Fund LP
- AUM: $4,535,171,497
- Minimum: $10,000,000
- Beneficial Owners: 376
Third Point Partners Qualified LP
- AUM: $3,695,133,444
- Minimum: $10,000,000
- Beneficial Owners: 1135
Third Point Enhanced LP
- AUM: $2,409,677,017
- Minimum: $10,000,000
- Beneficial Owners: 4
TP ETP Master LP
- AUM: $763,008,167
- Minimum: $50,000,000
- Beneficial Owners: 22
Fees at Third Point
Fees charged to the funds at Third Point general range from 1% to 2% annually. One of the firm's hedge funds may be charged more than 2% annually, though. These fees are typically taken from the funds monthly or quarterly, in advance.
The firm's hedge funds also receive a performance fee between 15% and 20% of the net realized and unrealized appreciation in net asset value. The incentive fee for one of the firm's funds, however, ranges from 20% to 25%.
What to Watch Out For
Third Point has one regulatory and civil judicial disclosures listed on its Form ADV. These disclosures relate to issues like compliance violations, as well as selling certain shares in a breach of EU regulations.
Note that only accredited investors can invest in hedge funds. To be an accredited investor, you need to have at least $200,000 of earned income ($300,000 for couples) in each of the past two years, plus an assumption that the same trend will follow for the current year. The other way to become an accredited investor is to have at least a $1 million net worth, minus the value of your primary residence. You can meet the latter either on your own or together with a spouse.
Becoming a Client Of Third Point
Remember that you can only work with Third Point if you're an accredited individual investor or an institution. If you meet either of these stipulations, get in touch with the firm for more information. You can call its New York headquarters at (212) 715-3880 or just go online to the Third Point website and send an email.
All information is accurate as of the writing of this article.
Investing Tips
- Not everyone has the means to work with a hedge fund. However, a financial advisor can be a similarly valuable resource when it comes to investing. Luckily, SmartAsset’s free tool matches you with financial advisors in your area in just five minutes. If you’re ready to be matched with local advisors, get started now.
- If you're investing on your own, it pays to be prepared and knowledgable. SmartAsset has you covered with a number of free online resources. For example, check out our asset allocation calculator to help get your portfolio in good shape.
