Fourth Quarter 2014 Investor Letter

Third Point Reinsurance

Research

8 Pages

Third Point reflects on navigating volatility in 2014 and outlines its positioning for a turbulent 2015. The letter argues that risk management mattered as much as stock selection, while highlighting activist successes in Amgen and a new investment in Fanuc amid growing global macro uncertainty.

Key Takeaways

Volatility Management Matters: Third Point returned 5.7% in Offshore versus 13.7% for the S&P 500 in 2014 after struggling through five market drawdowns exceeding 3.9%.
Amgen Value Creation: Amgen targeted operating margin expansion from 38% to at least 52%, raised its dividend 30%, and delivered nearly 45% shareholder returns during 2014.
Macro Risks Rising: In the first 25 trading days of 2015, 22 featured intraday market moves greater than 1%, reinforcing concerns about elevated volatility.
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