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Loeb's Third Point funds erase all losses, now up for the year

BOSTON (Reuters) – Billionaire investor Daniel Loeb told clients that his funds have wiped away all of the year’s earlier losses and are now in positive territory again after he overhauled the portfolio a few months ago, studding it with fast-growing technology companies.

The Third Point Offshore Fund is now up 4.4% for the year after gaining 8.4% in August and the Third Point Ultra Ltd fund is up 3.6% after a gain of 10.6% last month, Third Point told investors in a performance update seen by Reuters.

At the end of March the Offshore fund was down 16% and the Ultra fund was off 21%. Third Point funds were still in the red at the end of July and August’s gains pulled them back into positive territory.

The gains were fueled largely by gains in technology-oriented stocks, including Amazon (AMZN.O), Disney (DIS.N), and Alibaba, as well as gains in the firm’s credit portfolios, an investor (BABA.N) in the firm said.

Loeb, who founded Third Point a quarter of a century ago, took back the reins as sole chief investment officer at his hedge fund in May and pivoted toward trading the portfolio more actively after a disappointing first quarter that left the firm with double digit losses, the investor said.

Third Point’s biggest position remains Prudential Plc where the firm had pushed for the insurer to separate its U.S. and Asian businesses. Last month the company said that it would split off its U.S. business Jackson, planning a public listing for the unit next year. The company could then focus more on its fast-growing Asia business.

The hedge fund, whose assets have swelled to $16 billion thanks in part to strong returns, has always had a flexible investment mandate and now appears to be moving more toward long or short and possibly shorter term investments than the activist bets it can also make.

Last month Loeb told investors that he had taken new positions in Amazon, the Walt Disney Company, where streaming services are creating the company’s “biggest market opportunity ever,” Alibaba and JD.com.

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