Third Point Reinsurance 4Q16 Earnings Call Notes

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Daniel Loeb

Moved to financials and industrials after the election

“The Third Point equity portfolio was down 3.1% on average exposure during the fourth quarter. We shifted exposures meaningfully following the election, decreasing exposure to TMT and consumer and ramping up investments in financials, industrials and other cyclicals. Despite these moves, gains in financials and industrials were offset by losses in consumer and healthcare investments.”

Excited about the opportunity set

“We are excited about the opportunity set presented by the current market environment. We expect the combination of accelerating growth and fiscal stimulus and U.S. will create a reflationary market which is favourable for Third Point’s investment strategies including event driven and value investing, risk arbitrage and activism”

We see plenty of opportunities

“Yes. I mean, look, market levels are important. I’m not sure that given the increase in S&P earnings that we expect due to changes in policy as well as tax reform that it’s as overvalued as people think, but no we don’t invest in markets, we invest in individual companies and we are seeing – we’re seeing plenty of good valuation, situations particularly those in which companies are involved in some sort of corporate transaction and the complexity is obscuring the earnings power of the company or companies that are going through financial or operational restructuring. So, we’re not really fazed by that. And don’t forget we’re long short fund to the extent certain companies get ahead of themselves that provides a good hedging opportunity or short-selling opportunity for us as well, so we are not really fazed by that way of thinking.”