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Video:

This interview is exclusively open to LSE students.

Daniel S. Loeb

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Third Point Investment Management

Founder, CEO and CIO

$17 billion

NYC

Activist Investing

A.B. in Economics from Columbia University

United States

Background:

Daniel Loeb follows a value investing strategy and acts as an activist - where an investor buys a significant enough stake in a listed company to get a position on that companies board, and then pressure the management to make changes the investor believes would unlock shareholder value.

 

One of Loeb's signature tactics involves letter-writing. These letters usually cite the results of investigations he ordered, detailing management decisions and actions he considers detrimental to shareholder value. Loeb is well known on Wall Street for his attacks on what he views as greedy execs who also happen to be depressing shareholder value of shares he owns. "The moral-indignation business", Loeb sometimes calls it. "Hedge-fund guys love to read Loeb's attacks; 'he articulates what people feel', says one."

 

Mr Loeb has served on the board of five publicly traded companies: Ligand Pharmaceuticals; POGO Producing Co.; Massey Energy; Yahoo!; and Sotheby’s, where he helped oversee the successful sale of the company. His fund, Third Point Investment Management, now manages over $17 billion dollars and has generated 14.5% yearly compounded returns since inception in 1995.

 

Mr Loeb worked at Warburg Pincus, Jefferies, CitiGroup and Island Records prior to forming Third Point. Loeb attended the University of California at Berkeley for two years and subsequently graduated from Columbia University with an economics degree in 1983. By his senior year at Columbia, he had made $120,000 in the stock market but lost it all on an investment in a firm called Puritan-Bennett Inc. The loss taught him a lesson, he later said, in "overconcentrating positions".

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