It seemed as if this morning’s exuberant run into US equities would never stop but it would appear that comments from none other than Dan Loeb has (for now) put an end to the exuberance. With fundamentals collapsing, and even Cramer’s “Cult stocks” tumbling, today’s rally was yet another blindlingly obvious insight into the fact that this market is entirely artificial and Third Point’s Dan Loeb, worried about the global economy, has reduced his exposure to equities. Furthermore, he plans to return 10% of capital to investors. Not exactly the wealth-effect enhancing, confidence-inspiring action that the Fed hoped for…
Even the cult stocks are rolling over…
Via Third Point:
On US Equities:
These sales decreased long equity exposure, a move consistent with our growing concerns at the time about the global economy…
Year-End Return of Investor Capital
Third Point’s assets under management are currently $14 billion. Our increased size is primarily a result of a net annualized return since January 1, 2009 of 24% to investors in the flagship Partners fund and 29% in our slightly levered Ultra fund, which have led growth in the capital base since our initial close to new inflows in mid-2011. In an effort to moderate this growth, we have decided to give back a portion of 2013’s cumulative profits to investors.
We plan to return approximately 10% of capital in our private funds. This amount will be based on year-end account balances and will include any requested redemptions from investors, the deadline for which is October 31st. The capital return will be made to all applicable investors on a pro rata basis, but will exclude employee investments and the investment from our listed vehicle feeder fund (which will separately pay a redemption-funded dividend).
It seems increasingly the biggest (and smartest) players in the room are sensing the music is beginning to stop… Soros, Oaktree, and Klarman’s Baupost among many others…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/R48dzawC5Uo/story01.htm Tyler Durden