Daniel Loeb's 11% Loss in 2018 Was Worst Since the 2008 Crisis -- Update

By Rachael Levy 

Activist hedge-fund firm Third Point LLC lost about 11% last year, its worst performance since 2008.

The losses deepened in December when Third Point's Offshore Fund Ltd. dropped about 6% for the month, according to an investor document reviewed by The Wall Street Journal. Two other Third Point funds dropped by roughly the same amount. The 11% annual losses for those funds were disclosed in the same document.

Third Point, run by Chief Executive Daniel Loeb, is one of the most prominent hedge funds in the industry. It is known for taking large positions in companies and advocating aggressively for change via fiery letters from Mr. Loeb. Some of its recent bets were a big position in Campbell Soup Co . in 2018 and a large stake in Nestlé SA during 2017.

Before 2018, Third Point's worst year was 2008, according to a spokeswoman, when the Offshore Fund fell 33%. Third Point also was able to earn profits in recent years and raise billions. The firm managed about $18 billion as of last year. Mr. Loeb founded the firm in 1995 with $3 million.

Third Point was one of many hedge funds that struggled in 2018. David Einhorn's Greenlight Capital Inc. lost 9% in December and 34.3% for the year, according to an investor update reviewed by the Journal. Steven Cohen's Point72 Asset Management LP lost about 5% from its launch in February through November for some clients, the Journal earlier reported.

The average fund across the industry lost 2% through November, according to research firm HFR, compared with a 5.1% gain in the S&P 500 and a 2% gain in the Vanguard Balanced Index Fund, which invests roughly 60% in stocks and 40% in bonds. Those figures include dividends. HFR has yet to release performance figures for December.

The last few months of the year challenged other prominent funds. A $14 billion fund run by D.E. Shaw Group dropped 2.8% in November, the largest monthly drop since May 2010, according to a client update. The fund was up 7.3% this year through November, according to the update, beating peers.

A D.E. Shaw spokesman declined to comment.

Write to Rachael Levy at [e-mail]

(END) Dow Jones Newswires

January 03, 2019 17:28 ET (22:28 GMT)

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