Third Point, the $10.6bn hedge fund founded and run by Daniel Loeb, plans to invest in private credit, having bet on positive conditions for both equity and credit markets for 2024, according to a report by Reuters citing an investor note.
The report quotes Loeb in the investor note as confirming: “We will be adding private credit as a complement to our existing strategies and expect to begin investing in this new sector in the next few months.”
He added that Third Point will follow its playbook in “opportunistic credit investing, with increasing opportunities to act as a liquidity provider during times of heightened stress”.
According to the investor note, the firm expects returns to be fuelled by “a more stable interest rate environment that creates opportunities in event-driven situations, including those where active engagement can help catalyse value”.
Last year, the firm enlisted Chris Taylor, previously CEO of Madison Capital Fund, to help build its private credit business. Nearly 40% of Third Point’s portfolio is split between structured and corporate credit.
In the same year, Third Point’s bet on Bath & Body Works resulted in the company adding new members with industry expertise to the board and greater oversight on executive compensation.
Third Point reported a 3.6% gain for 2023 after a 22% loss the previous year.
