Third Point, the hedge fund led by Daniel Loeb, has disclosed a “meaningful” stake in US Steel, expressing confidence that the company’s proposed merger with Japan’s Nippon Steel will proceed despite recent political headwinds, according to a report by Reuters.
The report cites Loeb as writing in a recent investor letter seen by Reuters that Third Point expects the deal to go ahead due to the “industrial logic” of the tie-up, which the firm sees as aligned with broader US re-industrialisation goals. The previously undisclosed position lifted US Steel shares nearly 2% before paring gains to close at $43.92.
While the Biden administration blocked the deal earlier this year, President Trump has ordered a new national security review, sparking renewed speculation that the transaction could be revived.
Loeb emphasised that the merger could support “America First” industrial policy, pointing to potential benefits for US manufacturing and supply chain resilience.
Beyond its US Steel position, Third Point is increasing exposure to credit and event-driven strategies, according to the letter. The fund has ramped up its investments in activist and risk arbitrage trades, which Loeb believes are well-positioned to outperform amid heightened volatility and trade-related dislocations.
“Trading opportunities in credit are starting,” the firm wrote, citing signs of stress across sectors with exposure to protectionist trade policies, falling consumer savings, and rising unemployment.
Third Point’s structured credit investments returned 1.1% net of fees in Q1, outperforming broader equity markets. The fund’s TP Offshore Fund fell 3.7% during the quarter, ahead of the S&P 500’s 4.3% decline.
The firm is also reportedly growing a stake in consumer health firm Kenvue, joining other activist investors pushing for potential asset divestitures or a full sale, according to the Financial Times.
Third Point further bolstered its credit capabilities with the March acquisition of AS Birch Grove LP, a move aimed at expanding its footprint in credit at a time when allocators are increasingly seeking diversification away from traditional equity risk.
