Third Point sees AI path out of recent underperformance

investmentweek.co.uk:

Third Point said it had been investing in AI-enabled business models since its 2016 Series B venture investment in Upstart, describing it as “the firm’s most lucrative investment”.

Third Point returned 1.1% in its flagship fund during Q2, compared with an S&P 500 index return of 8.7% while the MSCI World index returned 7% in the same period.

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Third Point said its top positive contributors included tech names such as Microsoft, Amazon and Alphabet, as well as Ferguson and Pacific Gas & Electric.

Meanwhile, Alibaba was the greatest negative contributor, with Danaher, Catalent and International Flavors & Fragrances also performing poorly, along with a private position.

The manager addressed concerns on top five holding Danaher's underperformance but argued the recent slowdown in the bioprocessing industry and more cautious spending by biopharma customers was to blame, meaning the slowdown was likely temporary.

Shell's «staggering discount» was also addressed in the investor letter, with the manager arguing that it still represented a «compelling investment». It praised the firm's recent management changes, with the appointments of Wael Sawan as CEO and Sinead Gorman as CFO.

«They have demonstrated an unwavering commitment to shareholder value, capital discipline, and improved returns,» the manager said.

Third Point said it had been investing in AI-enabled business models since its 2016 Series B venture investment in Upstart, describing it as «the firm's most lucrative investment».

«The advent of generative AI will have an enormous impact on markets, and Third Point has added to positions in AI beneficiaries trading at reasonable valuations,» it