Hedge fund manager Daniel Loeb, who runs the $US14 billion Third Point LLC, is returning about $US1.4 billion to investors, according to the fund’s third quarter letter.
Loeb says one reason why he’s returning the capital is because of the fund’s exceptionally strong performance.
From Third Point’s Q3 letter (emphasis ours):
Year-End Return of Investor Capital
Third Point’s assets under management are currently $US14 billion. Our increased size is primarily a result of a net annualized return since January 1, 2009 of 24% to investors in the flagship Partners fund and 29% in our slightly levered Ultra fund, which have led growth in the capital base since our initial close to new inflows in mid-2011. In an effort to moderate this growth, we have decided to give back a portion of 2013’s cumulative profits to investors.
We plan to return approximately 10% of capital in our private funds. This amount will be based on year-end account balances and will include any requested redemptions from investors, the deadline for which is October 31st. The capital return will be made to all applicable investors on a pro rata basis, but will exclude employee investments and the investment from our listed vehicle feeder fund (which will separately pay a redemption funded dividend)
Third Point is up 18% year-to-date as of September 30. The S&P is up 19.8%.