Third Point Investors Ltd - Interim Report and Unaudited Condensed Interim Financial Statements For the period ended 30 June 2024
Interim Report and Unaudited Condensed
Interim Financial Statements
For the period ended
Financial and Portfolio
-- The Company returned 11.4% on a NAV total return basis and 14.6% on a
share price basis. This compares with a 12.0% return for the MSCI World
Index and a 15.3% return for the S&P 500 Index over the same period.
-- Long Equity positions contributed strongly to fund performance (+12.2%
gross):
-- This was led by Vistra, a Texas -based energy company, that has
appreciated in light of AI’s considerable power demands.
-- Other top contributors included Amazon, Meta, TSMC and
Microsoft, all of which exhibited positive earnings momentum,
due at least in part to the growth of AI.
-- Detractors included Du Pont deNemours, Bath & Body Works, Airbus
and Humana.
-- Short Equity positions detracted from performance overall (-2.1% gross),
with all detraction coming from portfolio and position-level hedges
while single name short positions were flat.
-- Corporate Credit and Structured Credit contributed modestly positive
additions to performance (+1.5% gross):
-- The Corporate Credit portfolio outperformed the High Yield Index
with positive contribution from cable positions in Radiate and
Frontier Communications.
-- The Structured Credit portfolio outperformed the broad fixed
income index, led by spread tightening in residential
mortgage-backed securities, and the decision to remain hedged on
interest rates.
-- The Privates portfolio enjoyed small gains (+0.6% gross) due to positive
developments from a single position.
Strategy Review
-- During the period, a Strategy Committee was formed comprising of Dimitri
Goulandris as Chair, Liad Meidar and Richard Boléat and commenced a full
review to consider how the Company may best deliver value to
Shareholders going forward.
-- The Strategy Committee is evaluating a wide range of options, including
M&A opportunities, investment strategy mixes, corporate continuation
votes or further tenders, and potentially other innovative options, and
has appointed Jefferies International Limited to assist with the
process.
-- The Company is seeking shareholder consultation and input and will
conclude the strategy review before year-end.
Operational
Discount Control
-- The Company continues to assign great importance to discount control
which was exercised during the period through the Redemption Offer. The
Board has authorised the further purchase of up to $20 million of shares
in the period from the completion of the Redemption Offer to 31 December
2024 if, in the Board’s view, it is in the interests of the Company and
Shareholders to do so.
-- The Company bought back 708,665 shares at a cost of $14.5 million in the
period ahead of the Redemption Offer ending March 2024 , completing the
buyback programme instigated in September 2023 .
-- In April 2024 , the Company held a Redemption Offer for 25% of
outstanding shares at a 2% discount to NAV. The offer closed in May and
was fully taken up Approximately 6 million shares were redeemed in cash
for a total value of approximately $160 million .
Governance
-- In May 2024 , all of the resolutions at the Annual General Meeting were
passed comfortably.
-- The Board appointed Dimitri Goulandris and Liad Meidar as Directors in
April and their formal appointment was confirmed by shareholders at the
AGM while Josh Targoff did not put himself forward for re-election to
the Board.
“The investment manager believes that inflationary pressures are much more under control and that real and absolute rates have likely peaked. This more stable interest rate environment can be expected to provide a more attractive backdrop that can play to the Manager’s investment strategy and strengths.
Exposure to AI-driven themes remain a key component of the Manager’s equity strategy, both amongst established incumbents, as well as in certain related sectors where AI can be a catalyst for value creation. The Investment Manager also still holds a variety of more value-oriented positions where it believes some kind of catalyst will unlock value. With monetary and regulatory headwinds potentially set to recede, Third Point expects to see more corporate activity, which it believes will precipitate additional opportunities in these event-driven situations.
The Board was pleased to establish the Strategy Committee during the period, commencing a full review to consider how the Company may best deliver value for shareholders going forward and we welcome shareholder input to assist the Strategy Committee with its work which will conclude before year-end.”
Media Enquiries
charles.ryland@buchanancomms.co.uk / Tel: Tel: +44 (0)20 7466 5107
henry.wilson@buchanancomms.co.uk / Tel: +44 (0)20 7466 5111
samuel.adams@buchanancomms.co.uk / Tel: +44 (0)20 7466 5162
Notes to Editors
About
About
Why
Exposure to the flagship
As a
Different pillars of investment strategy
The
Unconstrained and agile
The Investment Manager opportunistically pivots across asset classes, capital structure and geographic domicile according to where it sees good potential risk-adjusted returns. It is not a benchmark-driven fund and therefore it provides what it believes is a differentiated approach and outcome for global investors seeking diversification.
Constructivist engagement
Third Point aims to derive long-term value through various forms of constructivist engagement with companies in which it invests. It also pursues event-driven opportunities, identifying misunderstood catalysts such as M&A and special situations that we believe will unlock value.
Always striving to improve
The Investment Manager’s cultural philosophy values teamwork and improvement. It respects the Japanese business concept of Gemba Kaizen, which takes into consideration the skills of the entire organisation, with the understanding that even the smallest of adjustments will create value over time.
Governance
TPIL is a
Financial Highlights
As at
Net Asset Value per Share
+11.4%
30.06.2024:
31.12.2023:
Share Price
+14.6%
30.06.2024:
31.12.2023:
Performance for the Period
30.06.2024 31.12.2023 Change
Net Assets ($’000s)* $513,283 $637,967 -19.5%
Ordinary Shares in Issue 18,125,988 25,089,924 -27.8%
NAV per Share $28.32 $25.43 +11.4%
Share price $22.35 $19.50 +14.6%
Share price discount to NAV per Share -21.1 -23.3 -2.2
Annualised Historical Performance (%)
Since TPIL
1 Year 3 Year 5 Year 10 Year
Inception
Third Point Investors Limited (NAV) 20.5% -2.4% 7.4% 6.0% 7.7%
Third Point Investors Limited (Share 13.2% -6.1% 8.3% 4.0% 6.7%
Price)
S&P 500 Index 24.6% 10.0% 15.0% 12.9% 10.0%
MSCI World Index 20.8% 7.4% 12.4% 9.8% 7.4%
* Reflects the total AUM less borrowings and other liabilities of
Chairman’s Statement
Dear Shareholder,
During the six-month period to
During the comparable period, the S&P500 and MSCI All World Index rose by 15.3% and 12.0% respectively, driven by a continuing strong and very concentrated performance from large cap technology and AI-themed equities.
Performance and Portfolio Drivers
The Company’s improved performance overall has been driven by higher net exposures to equities, rising from 70% at 2023 year-end to 83% at the 2024 half year end. Please refer to the Investment Manager’s Review for greater detail.
Discount Management and Redemption Offer
The Board continues to assign great importance to discount control, both via its buyback programme and its planned Redemption Offers. In
Annual General Meeting
In
Governance
The Board appointed
Strategy Review
The Strategy Committee comprises
The Committee is evaluating a wide range of options, including M&A opportunities, investment strategy mixes, corporate continuation votes or further tenders, and potentially other innovative options and has appointed
At the conclusion of the Strategy Review, the Committee will present its findings to the Board. If approved by the Board, the outcome will then be reported by the Board to Shareholders, and any recommended new proposals will be put to Shareholders and voted on by them as appropriate. If at the outcome of the Strategy Review there are no new proposals recommended by the Board to Shareholders, the Board expects that, in due course, it will invite shareholders to vote on the continuation, or otherwise, of the Company. Under those circumstances, the Board will take into account the performance of the Company over the relevant period based on the NAV per Share and other metrics that it considers appropriate in determining whether to recommend voting in favour of the continuation resolution.
Outlook
The Investment Manager believes that inflationary pressures are now well under control and that real and absolute rates have likely peaked. While recent market volatility should continue given some of the macro uncertainties – from the US election in November to the possibility of escalation in the
PORTFOLIO
Investment Manager’s Review
Performance
For the six months ended
Equity market performance in the first half of 2024 was similar to the first half of 2023, as large cap technology stocks, especially those connected to Artificial Intelligence (AI), comprised the lion’s share of the gains. The tech-heavy Nasdaq (+17.4%) again outperformed the S&P 500 (+15.3%), while the S&P 500 Equal Weighted Index gained only 5.1% for the first six months of the year, reflecting the relatively narrow performance of the market-cap weighted indices. Credit markets, meanwhile, were subdued as interest rates remained elevated and spreads tight: the J.P. Morgan High Yield Index gained just 2.6% and the Bloomberg
Against this backdrop, Long Equity positions contributed positively to fund performance (+12.2% gross contribution to return), led by Vistra, a
Outlook
While August and September have brought volatility in equity markets and that volatility will likely persist into year-end, the Investment Manager’s macroeconomic view remains largely intact from the year-end review: leading indicators like wages, rents, quit rates and corporate margins are starting to decelerate, which should pave the way for the
This broader view accounts for the relatively constructive positioning of the equity portfolio, with net exposure around 75%. Within that equity net exposure, the Investment Manager continues to believe it makes sense to have a balance between high free cash-flow generating tech leaders and the AI thematic, as well as catalyst-driven and quality positions.
While much ink has been spilled on the waxing and waning of AI sentiment over the past year, Third Point continues to believe that this will be a durable investment theme in the years to come. In previous technology cycles – including the advent of the personal computer, mass adoption of the internet, cloud computing, and the rise of the smartphone and apps – it took several years before companies were able to persistently deliver a return on investment. Third Point believes that patience is warranted as these dynamics play out in AI and, in the meantime, it is focusing its attention first on the component and infrastructure layers (energy, data centres, chips, connectivity) rather than the model (i.e., virtual assistants) and application layers (software built on top of AI solutions). It is in these building blocks that value first accrued in previous tech cycles, including the mobile internet revolution from 2010 to 2016.
On the event-driven side of the portfolio, Third Point continues to believe that a more stable interest rate environment should continue to give rise to more corporate activity, whether through M&A, selling underperforming or noncore business lines, or optimizing balance sheets. That should play well into the firm’s event driven toolbox, and Third Point believes there will be more opportunity to add value.
The Investment Manager is also watching closely the upcoming US election for potential risks from more populist economic policies such as higher taxes and increased regulation if the
On the short side of the equity portfolio, Third Point is encouraged by recent efforts to better risk manage that portfolio. As described in the year-end review, Third Point in mid-2023 restructured its short equity portfolio to be far more diversified across industry, market cap and factor profile, while tightly limiting risk in names with high short interest. That approach yielded consistent alpha over the balance of 2023 and now in the first half of 2024 even as vigorous market performance has continued to render short selling difficult. Third Point has continued to add exposure to single name shorts given the positive results here, and expects to see continued progress as overall dispersion in the market (characterised by a higher spread between winners and losers) persists. Finally, Third Point has maintained a healthy allocation to credit, approximately 40% of NAV, given some of the idiosyncratic opportunities it has identified in Corporate Credit and Structured Credit. If the
Portfolio Analysis
As at
Exposure
Portfolio Detail 1 Long Short Net
Equity
Activism/Constructivism 7.7% -2.5% 5.2%
Fundamental & Event 117.6% -25.0% 92.6%
Portfolio Hedges 2 0.0% -14.7% -14.7%
Total Equity 125.2% -42.1% 83.1%
Credit
Corporate & Sovereign 18.0% -0.4% 17.6%
Structured 23.7% -0.1% 23.6%
Total Credit 41.7% -0.5% 41.2%
Privates 7.9% 0.0% 7.9%
Other 3 0.0% 0.0% 0.0%
Total Portfolio 174.9% -42.6% 132.2%
Exposure
Equity Portfolio Detail 1 Long Short Net
Equity Sectors
Consumer Discretionary 27.5% -4.0% 23.5%
Consumer Staples 0.0% -1.1% -1.1%
Utilities 14.7% -2.7% 12.0%
Energy 0.7% 0.0% 0.7%
Financials 17.5% -3.6% 13.9%
Healthcare 5.9% -2.7% 3.2%
Industrials & Materials 24.3% -4.5% 19.8%
Enterprise Technology 19.7% -3.4% 16.3%
Media & Internet 14.8% -5.4% 9.4%
Portfolio Hedges 2 0.0% -14.7% -14.7%
Total 125.2% -42.1% 83.1%
1
Unless otherwise stated, information relates to the
2 Primarily broad-based market and equity-based hedges.
3 Includes currency hedges and macro investments. Rates and FX related investments are excluded from the exposure figures.
Net equity exposure is defined as the long exposure minus the short exposure of all equity positions (including long/short, arbitrage, and other strategies), and can serve as a rough measure of the exposure to fluctuations in overall market levels. The Investment Manager continues to closely monitor the liquidity of the portfolio and is comfortable that the current composition is aligned with the redemption terms available to the Company by virtue of its holding of Class YSP shares.
Strategic Report
The Directors submit their Interim Report, together with the Statement of Assets and Liabilities, Statement of Operations, Statement of Changes in Net Assets, Statement of Cash Flows and the related notes of
The Interim Report and Unaudited Condensed Interim Financial Statements have been properly prepared, in accordance with applicable
The Company
The Company was incorporated in
The Ordinary Shares of the Company are quoted on the LSE in two currencies, US Dollars and Pounds Sterling.
The Company is a member of the
At the time of its listing, the Company adopted a share structure which was common at that time, to mitigate the risk of the Company losing its status as a “foreign private issuer” under US securities laws.
The Company has two classes of shares in issue: (i) Ordinary Shares which have economic and voting rights and (ii) Class
The Class
VoteCo is specifically excluded from voting from any of the twelve Listing Rules Specified Matters, being those matters in relation to which the Listing Rules require a resolution to be passed only by holders of listed shares, the most notable of which are:
any proposal to make a material change to the investment policy
any proposal to approve the entry into a related party transaction
the annual re-election of any non-independent director
At the time of the Company’s listing, it entered into a Support and Custody Agreement with VoteCo under which VoteCo agreed to hold the Class
Investment Objective and Policy
The Company’s investment objective is to provide its Shareholders with consistent long-term capital appreciation utilising the investment skills of
The Investment Manager identifies opportunities by combining a fundamental approach to single security analysis with a reasoned view on global, political and economic events that shapes portfolio construction and drives risk management.
The Investment Manager seeks to take advantage of market and economic dislocations and supplements its analysis with considerations of managing overall exposures across specific asset classes, sectors, and geographies by evaluating sizing, concentration, risk, and beta, among other factors. The resulting portfolio expresses the Investment Manager’s best ideas for generating alpha and its tolerance for risk given global market conditions. The Investment Manager is opportunistic and often seeks a catalyst that will unlock value or alter the lens through which the broad market values a particular investment. The Investment Manager applies aspects of this framework to its decision-making process, and this approach informs the timing of each investment and its associated risk.
The Company has substantially all of its holding in the
Any Ordinary Shares bought for the Company’s account (e.g. as part of the buyback programme) traded mid-month will be purchased and held by the
Results, Redemption Offer and Share Buybacks
The results for the period are set out in the Statement of Operations.
In
The Board originally adopted a share buyback programme in
In the period from
Key performance indicators (“KPIs”)
At each Board meeting, the Board considers a number of performance measures to assess the Company’s success in achieving its objectives. The KPIs which have been identified by the
Net Asset Value (NAV);
Discount to the NAV;
Share price; and
Ongoing charges.
Signed on behalf of the Board by:
Chairman
Director
Directors’ Report
Corporate Governance
The Board is guided by the principles and recommendations of the
Internal Control and Financial Reporting
The Directors acknowledge that they are responsible for establishing and maintaining the Company’s system of internal control and reviewing its effectiveness. Internal control systems are designed to manage rather than eliminate the failure to achieve business objectives and can only provide reasonable but not absolute assurance against material misstatements or loss.
The Directors review all controls including operations, compliance and risk management. The key procedures which have been established to provide internal control are:
Investment advisory services are provided by the Investment Manager. The Board is responsible for setting the overall investment policy, ensuring compliance with the Company’s Investment Strategy and monitoring the action of the
The Board considers the process for identifying, evaluating and managing any significant risks faced by the Company on an on-going basis. It seeks to ensure that effective controls are in place to mitigate these risks and that a satisfactory compliance regime exists to ensure all local and international laws and regulations are upheld;
The Board clearly defines the duties and responsibilities of its agents and advisors and appointments are made by the Board after due and careful consideration. The Board monitors the ongoing performance of such agents and advisors;
The Investment Manager and NT maintain their own systems of internal control, on which they report to the Board. The Company, in common with other investment companies, does not have an internal audit function.
The Audit Committee has considered the need for an internal audit function, but because of the internal control systems in place at the Investment Manager and NT, has decided it appropriate to place reliance on their systems and internal control procedures; and
The systems are designed to ensure effectiveness and efficient operation, internal control and compliance with laws and regulations. In establishing the systems of internal control, regard is paid to the materiality of relevant risks.
Management of Principal Risks and Uncertainties
In considering the risks and uncertainties facing the Company, the Audit Committee reviews regularly a matrix which documents the principal and emerging risks and reports its findings to the Board.
This discipline is in accordance with the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting, published by the FRC and has been in place for the period under review and up to the date of approval of the Interim Report and Unaudited Condensed Interim Financial Statements.
The risk matrix document considers the following information:
Reviewing the risks faced by the Company and the controls in place to address those risks;
Identifying and reporting changes in the risk environment;
Identifying and reporting changes in the operational controls; and
Identifying and reporting on the effectiveness of controls and remediation of errors arising.
The Directors have acknowledged they are responsible for establishing and maintaining the Company’s system of internal control and reviewing its effectiveness by focusing on four key areas:
Consideration of the investment advisory services provided by the Investment Manager;
Consideration of the process for identifying, evaluating and managing any significant current and emerging risks faced by the Company on an ongoing basis;
Clarity around the duties and responsibilities of the agents and advisors engaged by the Directors; and
Reliance on the Investment Manager and Administrator maintaining their own systems of internal controls.
The risk matrix considers all the significant risks to which the Company has been exposed during the financial period, which are unchanged from those described in the Report and Accounts for the year ended
Discount to the NAV
Shareholder relations
Valuation of investments
Concentration of the Investor Base
Underlying investment performance of the
Geopolitical and economic risk
Liquidity of shares in the
Performance of the Investment Manager
It is expected that the principal risks and uncertainties listed above will apply to the Company for a minimum of the next six months. However, the Board will be carrying out a Strategy Review over the balance of 2024 and, depending on the outcome of this exercise, it is possible that the principal risks and uncertainties may change.
Going Concern
The
The Board will carry out a Strategy Review in 2024. At the conclusion of the Strategy Review, the Strategy Committee will present its findings to the Board. If approved by the Board, the outcome will then be reported by the Board to Shareholders, and any recommended new proposals will be put to Shareholders, and voted on by them as appropriate. On the assumption that the Committee is able to identify a positive direction for the Company, which is approved by Shareholders, the Company will continue into the future.
On that basis, after due consideration, and having made due enquiry of Third Point, the Directors are satisfied that it is appropriate to continue to adopt the going concern basis in preparing these Unaudited Condensed Interim Financial Statements for the period through
Statement of Directors’ Responsibilities in Respect of the Unaudited Condensed Interim Financial Statements
The Directors are responsible for preparing the Unaudited Condensed Interim Financial Statements in accordance with applicable Guernsey Law and accounting principles generally accepted in
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the Unaudited Condensed Interim Financial Statements comply with The Companies (
The Directors have responsibility to confirm that:
the Interim Report and Unaudited Condensed Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in
the Interim Report and Unaudited Condensed Interim Financial Statements provide a fair review of the information required by:
a) DTR 4.2.7 of the Disclosure and Transparency Rules (DTR), being an indication of important events that have occurred during the first six months of the financial year 2024 and their impact on the Interim Report and Unaudited Condensed Interim Financial Statements and a description of the principal risks and uncertainties for the remaining six months of the year; and
b) DTR 4.2.8 of the DTR, being related party transactions that have taken place in the first six months of the current financial year 2024 and that have materially affected the financial position or performance of the Company during the six month period ended
Significant Events
On
On
There were no other events during the financial period outside the ordinary course of business which, in the opinion of the Directors, may have had an impact on the Unaudited Condensed Interim Financial Statements for the period ended
Signed on behalf of the Board by:
Chairman
Director
INDEPENDENT REVIEW REPORT
Independent Review Report to
Conclusion
We have been engaged by
Based on our review, nothing has come to our attention that causes us to believe that the Unaudited Condensed Interim Financial Statements for the six months ended
Basis for Conclusion
We conducted our review in accordance with International Standard on Review Engagements 2410 (
As disclosed in Note 3, the Annual Financial Statements of the Company are prepared in accordance with US GAAP. The Unaudited Condensed Interim Financial Statements have been prepared in accordance with US GAAP.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with International Standard on Review Engagements 2410 (
Responsibilities of the Directors
The Directors are responsible for preparing the Interim Report and Unaudited Condensed Interim Financial Statements in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom’s
In preparing the Interim Report and Unaudited Condensed Interim Financial Statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Review of the Financial Information
In reviewing the Interim Report and Unaudited Condensed Interim Financial Statements, we are responsible for expressing to the Company a conclusion on the Unaudited Condensed Interim Financial Statements. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.
Use of our report
This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (
Notes:
(1) The maintenance and integrity of the Company’s website is the sole responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditor accepts no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.
(2)
Legislation in
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
30 June 2024 31 December 2023
(unaudited) (audited)
Notes US$ US$
Assets
Investment in Third Point Offshore Fund Ltd
at fair value (Cost: US$192,246,583 ; 31 496,371,974 628,751,973
December 2023: US$340,474,153 )
Investment in Participation Note 3 15,193,588 5,005,646
Cash and cash equivalents 2,247,419 190,603
Due from broker 12,817 12,538
Redemption receivable - 4,258,882
Other assets 52,866 81,405
Total assets 513,878,664 638,301,047
Liabilities
Accrued expenses and other liabilities 588,613 330,194
Administration fee payable 6,318 3,187
Total liabilities 594,931 333,381
Net assets 513,283,733 637,967,666
Number of Ordinary Shares in issue 7
US Dollar Shares 18,125,988 25,089,924
Net asset value per Ordinary Share 9, 12
US Dollar Shares $28.32 $25.43
Number of Ordinary B Shares in issue 7
US Dollar Shares 12,083,993 16,726,618
The financial statements were approved by the Board of Directors on
Chairman
Director
See accompanying notes.
Statement of Operations
30 June 2024 30 June 2023
(unaudited) (unaudited)
Notes US$ US$
Realised and Unrealised gain/(loss) from
investment transactions allocated from Master
Fund
Net realised (loss)/gain from securities,
derivative contracts and foreign currency (12,585,640) 2,310,075
translations
Net change in unrealised gain/(loss) on
securities, derivative contracts and foreign 63,546,038 (34,410,382)
currency translations
Net gain from currencies allocated from Master 123,296 135,214
Fund
Total net realised and unrealised gain/(loss)
from investment transactions allocated from 51,083,694 (31,965,093)
Master Fund
Net investment gain allocated from Master Fund
Interest income 12,612,680 17,950,060
Dividends, net of withholding taxes of 1,808,609 2,101,918
US$560,323 ; (30 June 2023 : US$831,511 )
Other income 1,165,999 1,185,541
Stock borrowing fees (50,352) (169,698)
Investment Management fee (3,600,933) (4,237,044)
Dividends on securities sold, not yet purchased (830,020) (755,463)
Interest expense (7,327,094) (4,362,295)
Other expenses (1,531,662) (1,223,439)
Total net investment gain allocated from Master 2,247,227 10,489,580
Fund
Company expenses
Administration fee 5 (58,707) (63,508)
Directors' fees 6 (204,160) (178,221)
Other fees (1,042,030) (529,711)
Loan interest expense 4 - (7,319,197)
Expenses paid on behalf of Third Point Offshore (43,798) (55,181)
Independent Voting Company Limited1
Total Company expenses (1,348,695) (8,145,818)
Net gain 898,532 2,343,762
Net increase/(decrease) in net assets resulting 51,982,226 (29,621,331)
from operations
1
See accompanying notes.
Statement of Changes in Net Assets
30 June 2024 30 June 2023
(unaudited) (unaudited)
Notes US$ US$
Change in net assets resulting from operations
Net realised (loss)/gain from securities,
commodities, derivative contracts and foreign (12,585,640) 2,310,075
currency translations allocated from Master
Fund
Net change in unrealised gain/(loss) on
securities, derivative contracts and foreign 63,546,038 (34,410,382)
currency translations allocated from Master
Fund
Net gain from currencies allocated from Master 123,296 135,214
Fund
Total net investment gain allocated from Master 2,247,227 10,489,580
Fund
Total Company expenses (1,348,695) (8,145,818)
Net increase/(decrease) in net assets resulting 51,982,226 (29,621,331)
from operations
Decrease in net assets resulting from capital
share transactions
Share redemptions 7 (176,666,159) (21,189,158)
Net assets at the beginning of the period 637,967,666 676,842,879
Net assets at the end of the period 513,283,733 626,032,390
See accompanying notes.
Statement of Cash Flows
30 June 2024 30 June 2023
(unaudited) (unaudited)
Notes US$ US$
Cash flows from operating activities
Operating expenses (755,353) (400,433)
Interest received / (paid) 361,771 (6,745,042)
Directors' fees (204,160) (178,221)
Administration fee (55,576) (60,245)
Third Point Independent Voting Company Limited¹ (43,798) (55,181)
Change in investment in the Master Fund 2,753,932 157,749,927
Cash inflow from operating activities 2,056,816 150,310,805
Cash flows from financing activities
Credit facility repayment - (149,996,358)
Cash outflow from financing activities - (149,996,358)
Net increase in cash 2,056,816 314,447
Cash and cash equivalents at the beginning of 190,603 64,597
the period
Cash and cash equivalents at the end of the 2,247,419 379,044
period
1
2024 2023
Notes US$ US$
Supplemental disclosure of non-cash
transactions from:
Operating activities
Subscriptions (138,989,490) 19,785,987
Redemption of Company Shares from Master Fund 7 157,959,579 21,189,158
Financing activities
Share redemptions 7 (18,970,089) (21,189,158)
Amortisation of loan cost - 574,155
Investment in Participation Note 10,838,559 2,325,373
See accompanying notes.
Notes to the Unaudited Condensed Interim Financial Statements
For the period ended
1. The Company
2. Organisation
Investment Objective and Policy
The Company’s investment objective is to provide its Shareholders with consistent long-term capital appreciation, utilising the investment skills of the Investment Manager, through investment of all of its capital (net of short-term working capital requirements) through a master-feeder structure in shares of
The Master Fund’s investment objective is to seek to generate consistent long-term capital appreciation, by investing capital in securities and other instruments in select asset classes, sectors and geographies, by taking long and short positions.
Investment Manager
The Investment Manager is a limited liability company formed on
During the period ended
Class YSP shares are subject to a 25% investor level gate. The Company’s investment in the
3. Significant Accounting Policies
Basis of Presentation
These Unaudited Interim Condensed Financial Statements have been prepared in accordance with relevant accounting principles generally accepted in
The Directors have determined that the Company is an investment company in conformity with US GAAP. Therefore, the Company follows the accounting and reporting guidance for investment companies in the
The following are the significant accounting policies adopted by the Company:
Cash and cash equivalents
Cash in the Statement of Assets and Liabilities and for the Statement of Cash Flows is unrestricted and comprises cash at bank and on hand.
Due from broker
Due from broker includes cash balances held at the Company’s clearing broker at
Redemptions Receivable
Redemptions receivable are capital withdrawals from the
Valuation of Investments
The Company records its investment in the
The following schedule details the movements in the Company’s holdings in the
Net
Asset
Shares Shares Value Net Asset
Shares Shares Shares Per
held at Shares Shares Share held at Value at
Rolled Transferred Transferred adjustments* Share
1 January Issued Redeemed 30 June at 30
Up In Out 2024
2024 30 June 2024
June
2024**
Class YSP
- 1.25,
1,528,709 — — — — (219,179) (241) 1,309,289 379.12 496,371,974
Series
1-1
Class YSP
- 1.25,
440,995 — — — — (440,980) (15) — — —
Series
1.4
Class YSP
- 1.25,
440,995 — — — — (449,979) (16) — — —
Series
1.5
Class YSP
- 1.25, 48,999 — — — — (48,998) (1) — — —
Series 2.
Class YSP
- 1.25,
49,999 — — — — (49,998) (1) — — —
Series
2-2
Class
YBSP-125, 38,244 — — — — (38,244) — — — —
Series 2
Class
YBSP-125, 231,713 — — — — (231,713) — — — —
Series 3
Class
YBSP-125, — — — — 1,389,895 (1,389,895) — — — —
Series 3
Total 496,371,974
* Share adjustments relate to transfers from the portion of shareholders' capital attributable to Legacy Private Investments.
** Rounded to two decimal places.
A portion of the Company’s investment in the
The valuation of securities held by the
The Company has adopted ASU 2015-07, Disclosures for Investments in Certain Entities that calculate Net Asset Value per Share (or its equivalent) (“ASU 2015-07”), in which certain investments measured at fair value using the net asset value per share method (or its equivalent) as a practical expedient are not required to be categorised in the fair value hierarchy. Accordingly the Company has not levelled applicable positions.
Uncertainty in Income Tax
ASC Topic 740 ‘Income Taxes’ requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are ‘more- likely-than-not’ of being sustained by the applicable tax authority based on the technical merits of the position. Tax positions deemed to meet the ‘more-likely-than-not’ threshold would be recorded as a tax benefit or expense in the year of determination. Management has evaluated the implications of ASC 740 and has determined that it has not had a material impact on these Unaudited Condensed Interim Financial Statements.
Income and Expenses
The Company records its proportionate share of the Master Fund’s income, expenses and realised and unrealised gains and losses on a monthly basis. In addition, the Company accrues interest income, to the extent it is expected to be collected, and other expenses.
Use of Estimates
The preparation of Unaudited Condensed Interim Financial Statements in conformity with US GAAP may require management to make estimates and assumptions that affect the amounts and disclosures in the financial statements and accompanying notes. Actual results could differ from those estimates. Other than what is underlying in the
Going Concern
The
The Board will carry out a Strategy Review in 2024. At the conclusion of the Strategy Review, the Strategy Committee will present its findings to the Board. If approved by the Board, the outcome will then be reported by the Board to Shareholders, and any recommended new proposals will be put to Shareholders, and voted on by them as appropriate. On the assumption that the Committee is able to identify a positive direction for the Company, which is approved by Shareholders, the Company will continue into the future.
On that basis, after due consideration, and having made due enquiry of Third Point, the Directors are satisfied that it is appropriate to continue to adopt the going concern basis in preparing these Unaudited Condensed Interim Financial Statements for the period through
Foreign Exchange
Investment securities and other assets and liabilities denominated in foreign currencies are translated into United States Dollars using exchange rates at the reporting date. Purchases and sales of investments and income and expense items denominated in foreign currencies are translated into United States Dollars at the date of such transaction. All foreign currency transaction gains and losses are included in the Statement of Operations.
Recent accounting pronouncements
The Company has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective. The amendments and interpretations which apply for the first time in 2024 have been assessed and do not have an impact on the Unaudited Condensed Interim Financial Statements.
Credit facility
The Company accounted for the credit facility as a liability, initially recognised at the amount drawn less any related costs. Issuance costs were amortised and recognised as additional interest expense over the life of the loan. At each balance sheet date, the liability was adjusted for the repayment of principal, accrual of interest and amortization of issuance costs. The credit facility was fully repaid as of
4. Credit Facility
On
In conjunction with the negotiation and execution of the agreement there were costs incurred by the Company. The Company paid the issuer of the facility
5. Material Agreements
Management and Incentive fees
The Investment Manager was appointed by the Company to invest its assets in pursuit of the Company’s investment objectives and policies. As disclosed in Note 2, the Investment Manager is remunerated by the
Administration fees
Under the terms of an Administration Agreement dated
The Administrator is paid fees based on the NAV of the Company, payable quarterly in arrears. The fee is at a rate of 2 basis points of the NAV of the Company for the first £500 million of NAV and a rate of 1.5 basis points for any NAV above £500 million. This fee is subject to a minimum of £4,250 per month. The Administrator is also entitled to an annual corporate governance fee of £30,000 for its company secretarial and compliance activities.
In addition, the Administrator is entitled to be reimbursed out-of-pocket expenses incurred in the course of carrying out its duties, and may charge additional fees for certain other services.
Total Administrator expenses during the period amounted to
VoteCo
The Company has entered into a support and custody agreement with
6. Directors’ Fees
At the AGM in
The Directors’ fees during the period amounted to
The current fee rates for the individual Directors are as follows;
Chairman £76,000
Audit Committee Chairman £57,000
Director £48,000
Senior Independent Director £3,000
Chairman of the Management Engagement Committee £3,000
Chairman of the
Chairman of the Strategy Committee £3,000
The Directors are also entitled to be reimbursed for expenses properly incurred in the performance of their duties as Director.
7.
The Company was incorporated with the authority to issue an unlimited number of Ordinary Shares (the “Shares”) with no par value and an unlimited number of Ordinary B Shares (“B Shares”) of no par value.
Number of Ordinary Shares US Dollar Shares
Shares issued
Shares Cancelled
Shares cancelled during the period (6,963,936)
Total shares cancelled during the period (6,963,936)
Shares in issue at end of the period 18,125,988
US Dollar Shares
US$
Net assets at the beginning of the period 637,967,666
Shares Cancelled
Share value cancelled during the period (176,666,159)
Total share value cancelled during the period (176,666,159)
Net increase in net assets resulting from operations 51,982,226
Net assets at end of the period 513,283,733
Number of Ordinary B Shares US Dollar Shares
Shares in issue as at
Shares Cancelled
Shares cancelled during the period (4,642,625)
Total shares cancelled during the period (4,642,625)
Shares in issue at end of the period 12,083,993
Voting Rights
Ordinary Shares carry the right to vote at general meetings of the Company and to receive any dividends, attributable to the Ordinary Shares as a class, declared by the Company and, in a winding-up will be entitled to receive, by way of capital, any surplus assets of the Company attributable to the Ordinary Shares as a class in proportion to their holdings remaining after settlement of any outstanding liabilities of the Company. B Shares also carry the right to vote at general meetings of the Company but carry no rights to distribution of profits or in the winding-up of the Company.
As prescribed in the Company’s Articles, each Shareholder present at general meetings of the Company shall, upon a show of hands, have one vote. Upon a poll, each Shareholder shall, in the case of a separate class meeting, have one vote in respect of each Share or B Share held and, in the case of a general meeting of all Shareholders, have one vote in respect of each Share or B Share held. Fluctuations in currency rates will not affect the relative voting rights applicable to the Shares and B Shares.
Repurchase of Shares
The Board originally adopted a share buyback programme in
Any Shares purchased are held by the
Any shares traded mid-month are purchased and held by the
Further issue of Shares
Under the Articles, the Directors have the power to issue further shares on a non-pre-emptive basis. If the Directors issue further Shares, the issue price will not be less than the then-prevailing estimated weekly NAV per Share of the relevant class of Shares.
8. Taxation
The Fund is exempt from taxation in
9. Calculation of Net Asset Value
The NAV of the Company is equal to the value of its total assets less its total liabilities. The NAV per Share is calculated by dividing the NAV by the number of Ordinary Shares in issue on that day.
10. Related Party Transactions
At
11. Significant Events
On
On
There were no other events outside the ordinary course of business which, in the opinion of the Directors, may have had an impact on the Unaudited Condensed Interim Financial Statements for the period ended
12. Financial Highlights
The following tables include selected data for a single Ordinary Share in issue at the year-end and other performance information derived from the Audited Financial Statements.
US Dollar Shares
US$
Per Share Operating Performance
Net Asset Value beginning of the period 25.43
Income from Operations
Net realised and unrealised gain from investment transactions allocated from
Net loss (0.06)
Total Return from Operations 2.72
Share buyback accretion 0.17
Net Asset Value, end of the period 28.32
Total return before incentive fee allocated from
Total return after incentive fee allocated from
Total return from operations reflects the net return for an investment made at the beginning of the year and is calculated as the change in the NAV per Ordinary Share during the year ended
US Dollar Shares
US$
Per Share Operating Performance
Net Asset Value beginning of the period 24.46
Income from Operations
Net realised and unrealised loss from investment transactions allocated from
Net loss (0.30)
Total Return from Operations (1.10)
Share buyback accretion 0.18
Net Asset Value, end of the period 23.54
Total return before incentive fee allocated from
Total return after incentive fee allocated from
Total return from operations reflects the net return for an investment made at the beginning of the year and is calculated as the change in the NAV per Ordinary Share during the year ended
US Dollar Shares
US$
Supplemental data
Net Asset Value, end of the period 513,283,733
Average Net Asset Value, for the period 1 604,606,510
Ratio to average net assets
Operating expenses 2 (2.43%)
Total operating expenses 2 (2.43%)
Net gain 3 0.15%
US Dollar Shares
US$
Supplemental data
Net Asset Value, end of the period 626,032,390
Average Net Asset Value, for the period 1 644,115,181
Ratio to average net assets
Operating expenses 2 (2.93%)
Total operating expenses 2 (2.93%)
Net gain 0.36%
1 Average Net Asset Value for the period is calculated based on published monthly estimates of NAV.
2
Operating expenses are Company expenses together with operating expenses allocated from the
3
Net gain (or loss) is taken from the Statement of Operations and is the net investment gain / (loss) for the period allocated from the
13. Ongoing Charge Calculation
Ongoing charges for the period ended
Excluding performance fees
US Dollar Shares 2.16% 1.92%
Including performance fees
US Dollar Shares 2.16% 1.92%
14. Subsequent Events
The Directors confirm that, up to the date of approval, which is
ADDITIONAL INFORMATION
Investor Information
Financial Calendar
Year end 31 December.
Annual results announced and Annual Report published in April.
Annual General Meeting held in May/June.
Interim results announced in September.
Website
Further information about
How to invest
Information is available on
Management and Administration
Directors
Richard Boléat*
Joshua L Targoff (resigned
PO Box 255, Trafalgar Court, Les Banques,
* These Directors are independent.
Investment Manager
55 Hudson Yards,
Auditors
PO Box 9,
St Julian’s Avenue,
Exchange House,
Registrar and CREST Service Provider
(formerly
Registered Office
PO Box 255, Trafalgar Court, Les Banques,
Administrator and Secretary
PO Box 255, Trafalgar Court, Les Banques,
Mourant
Receiving Agent
The Registry,
Beckenham, Kent, BR3 4TU,
Corporate Broker
Deutsche Numis
Legal Information
Unless otherwise noted, all performance, portfolio exposure and other portfolio data included herein relates to the
Past performance is not necessarily indicative of future results, and there can be no assurance that the Funds will achieve results comparable to those of prior results, or that the Funds will be able to implement their respective investment strategy or achieve investment objectives or otherwise be profitable.
This document is being furnished to you on a confidential basis to provide summary information regarding a potential investment in the Funds and may not be reproduced or used for any other purpose. Your acceptance of this document constitutes your agreement to (i) keep confidential all the information contained in this document, as well as any information derived by you from the information contained in this document (collectively, ‘Confidential Information’) and not disclose any such Confidential Information to any other person, (ii) not use any of the Confidential Information for any purpose other than to consider an investment in the Funds, (iii) not use the Confidential Information for purposes of trading any security, (iv) not copy this document without the prior written consent of Third Point and (v) promptly return this document and any copies hereof to Third Point, or destroy any electronic copies hereof, in each case upon Third Point’s request (except that you may retain copies as required by your compliance program). The distribution of this document in certain jurisdictions may be restricted by law. Prospective investors should inform themselves as to the legal requirements and tax consequences of an investment in the Funds within the countries of their citizenship, residence, domicile and place of business.
All profit and loss or performance results are based on the Net Asset Value of fee-paying investors only and are presented net of management fees, brokerage commissions, administrative expenses, any other expenses of the Funds, and accrued incentive allocation, if any, and include the reinvestment of all dividends, interest, and capital gains. From Fund inception through
While the performances of the Funds have been compared here with the performance of well-known and widely recognised indices, the indices have not been selected to represent an appropriate benchmark for the Funds whose holdings, performance and volatility, among other things, may differ significantly from the securities that comprise the indices. Investors cannot invest directly in an index (although one can invest in an index fund designed to closely track such index). Indices performance includes reinvestment of dividends and other earnings, if any.
All information provided herein is for informational purposes only and should not be deemed as a recommendation or solicitation to buy or sell securities including any interest in any fund managed or advised by Third Point. All investments involve risk including the loss of principal. This transmission is confidential and may not be redistributed without the express written consent of
Specific companies or securities shown in this presentation are for informational purposes only and meant to demonstrate Third Point’s investment style and the types of industries and instruments in which the Funds invest and are not selected based on past performance. The analyses and conclusions of Third Point contained in this presentation include certain statements, assumptions, estimates and projections that reflect various assumptions by Third Point concerning anticipated results that are inherently subject to significant economic, competitive, and other uncertainties and contingencies and have been included solely for illustrative purposes. No representations, express or implied, are made as to the accuracy or completeness of such statements, assumptions, estimates or projections or with respect to any other materials herein. Third Point may buy, sell, cover or otherwise change the nature, form or amount of its investments, including any investments identified in this letter, without further notice and in Third Point’s sole discretion and for any reason. Third Point hereby disclaims any duty to update any information in this letter.
Information provided herein, or otherwise provided with respect to a potential investment in the Funds, may constitute non-public information regarding
While Third Point believes the information in this presentation to be accurate, no reliance on this presentation should be placed. The information contained herein is subject to change without notice. An offer to invest in the Funds will only be made pursuant to the confidential private placement memorandum (the ‘PPM’), the Fund’s limited partnership agreement (as applicable), and the Fund’s subscription agreement, subject to any disclaimers, terms and conditions contained therein. Investors are encouraged to read the PPM and consult with their own advisers before deciding whether to invest in the Funds and periodically thereafter. Third Point will not accept new subscriptions into
The representative in
