Third Point Investors Ltd - TPIL Announces Update on Strategic Measures
PR Newswire
London, September 1
1 September 2021
Third Point Investors Limited Announces Two Additional Measures in Furtherance of its Strategic Plan
- Credit facility of $150 million to be deployed into the Master Fund over time
- Board will seek shareholder approval for extension of exchange facility at tighter discount
Third Point Investors Limited ("TPIL" or the "Company"), the London-listed, multi-strategy investment company managed by Third Point LLC (the "Investment Manager"), is pleased to announce that it has entered into a loan agreement to employ gearing and will seek approval of an extension of its exchange facility as part of a previously announced package of changes aimed at enhancing shareholder value.
Loan Facility
TPIL has entered into a credit facility, pursuant to which it will borrow approximately $150 million at a rate of LIBOR plus 2.4% for a period of two years, with the ability to extend annually or repay early subject to small "make whole" payments. The proceeds will be used to invest in the Master Fund and will be deployed gradually before year-end in consultation with the Investment Manager. Importantly, the Investment Manager will not charge a management fee in respect of the Master Fund units acquired by the Company using this leverage.
The credit facility is the latest of the Company's announced list of changes to be enacted after the completion of a strategic review conducted in consultation with shareholders.
Exchange Facility
Also included in the strategic plan announced on 1 April was a two-part, 25% tender offer in 2024 and 2027 if the discount to NAV persists above 10% and 7.5%, respectively, as well as the ability for eligible shareholders to exchange TPIL shares for shares in the Master Fund at a 7.5% discount to NAV this autumn. The latter measure was recently approved by shareholders at the Company's Annual General Meeting.
The TPIL share price has returned 31% for the year-to-date and 73% on a one-year basis. Performance has been broad-based across equities, corporate credit and structured credit, and with robust contribution from Upstart (NASDAQ: UPST) and SentinelOne (NYSE: S), both of which were initially expansion stage venture investments that have subsequently publicly listed and have appreciated more than 100x since the Investment Manager's original investments in 2015. TPIL's discount to NAV has closed from approximately 20% to a range of 10-15% in the five months since the Board announced its newest discount control measures, aided by these items and the strong performance.
Given the narrowing of the discount over the past several months, the Board also intends to seek shareholder approval for the exchange facility to be offered again in 2022, whereby eligible shareholders will be able to exchange their shares in the Company for shares in the Master Fund at just a 2% discount to NAV, down from the 7.5% discount to NAV applicable to the 2021 exchange facility. The Board also anticipates increasing the number of Company shares which can be exchanged for Master Fund shares under the 2022 exchange facility to the extent that the 2021 exchange facility is undersubscribed, subject to a maximum of $75 million worth of Company shares (at the prevailing NAV per share).
Steve Bates, Chairman of TPIL, said: "Given the Investment Manager's strong performance and constructive view on the opportunity set, the Board felt that applying a modest amount of leverage over time would be additive to overall shareholder value. We feel the flexibility aligns with the Company's decision to increase its exposure to private markets opportunities, where the Investment Manager has had particular success. Meanwhile, as the strategic discount control measures continue to bear fruit, we acknowledge that this is an iterative process, and we intend to continue to be proactive in refining our approach."
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Notes to Editors
About Third Point Investors Limited
www.thirdpointlimited.com
Third Point Investors Limited (LSE: TPOU) was listed on the London Stock Exchange in 2007 and is a feeder fund that invests in the Third Point Offshore Fund (the Master Fund), offering investors a unique opportunity to gain direct exposure to founder Daniel S. Loeb's investment strategy. The Master Fund employs an event-driven, opportunistic strategy to invest globally across the capital structure and in diversified asset classes to optimize risk-reward through a market cycle. TPIL's portfolio is 100% aligned with the Master Fund, which is Third Point's largest hedge fund. TPIL's assets under management are currently $1.1 billion.
About Third Point LLC
Third Point LLC is an institutional investment manager that actively engages with companies across their lifecycle, using dynamic asset allocation and an ethos of continuous learning to drive long-term shareholder return. Led by Daniel S. Loeb since its inception in 1995, the Firm has a 35-person investment team, a robust quantitative data and analytics team, and a deep, tenured business team. Third Point manages approximately $17.2 billion in assets for sovereign wealth funds, endowments, foundations, corporate & public pensions, high-net-worth individuals, and employees.
