Hedge fund billionaire Dan Loeb is losing money on consumer and tech stocks

Dan Loeb, founder of Third Point LLC.

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Dan Loeb, founder of Third Point LLC.
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Thomson Reuters

  • Dan Loeb’s Offshore fund is up 0.7% year-to-date, and lost 3% in February.
  • That’s lower than the S&P 500 benchmark, which has gained 1.8% so far in 2018.

LONDON – Third Point’s Offshore Fund has had a rocky start to 2018.

The hedge fund set up by US billionaire investor Daniel Loeb has gained just 0.7% so far in 2018, according to a filing in the UK on Friday. That’s less than the 1.8% overall rise in the S&P 500 stock market benchmark since the start of the year.

The fund lost 3% in February, beating the 3.7% downturn in the S&P 500.

“February performance was primarily driven by negative performance in core long equity positions across several sectors including Consumer, Healthcare, and TMT,” the fund said in a statement. “Short equity positions generated positive returns. Asset-backed securities contributed the majority of gains in Credit.”

The firm’s long positions lost 3.9%, while the short positions – which are bets that the price of stocks will fall – gained 0.8% in February.

Despite the dip, the Offshore fund is beating the S&P by a wide margin when historical performance since 1996 is taken into account. The fund has returned an average of 15.7% a year, compared with the S&P’s 8.2% returns.

Loeb’s fund has large stakes in Nestle, Facebook, and Alibaba, the Chinese e-commerce giant. Last year Third Point bought 4.5 million shares of Alibaba, worth about $634.1 million.