Dan Loeb’s Third Point Reinsurance Ltd., which had an initial public offering in August, rallied as analysts at Keefe, Bruyette & Woods raised their earnings estimate on better-than-expected investment results.
The reinsurer climbed 3.1 percent to $14.94 at 4:05 p.m. in New York after reporting that its investments managed by Loeb’s Third Point LLC gained 2.5 percent in September, and 17 percent in the first nine months of the year. Those results led the KBW analysts to boost their earnings estimate for the third quarter to 31 cents a share from 20 cents.
“We project annualized performance of 15 percent, but actual results will almost certainly be much more volatile,” analysts led by Meyer Shields wrote in a note yesterday.
Third Point Re highlighted Loeb’s track record when promoting the IPO, which raised $276 million, selling shares at $12.50. Almost all the Bermuda-based company’s investments are managed by his hedge fund, giving investors a chance to participate in his results without being directly invested with Third Point LLC.
Loeb focuses on so-called event-driven investing, buying and selling stocks or bonds of companies going through changes like spinoffs or mergers. He has pushed Yahoo! Inc. and Sony Corp. to make changes with the goal of driving up share prices.
His main fund returned 15 percent this year through August and has averaged annual returns of about 17.8 percent since inception in late 1996, according to an online report.