Third Point Investors Ltd - TPIL Statement of Third Point's New Redemption Policy
PR Newswire
LONDON, United Kingdom, May 25
25 May 2023
TPIL Statement on Third Point's New Redemption Policy
This announcement contains inside information.
The Board of Third Point Investors Limited ("TPIL" or the "Company") wishes to update shareholders on certain amendments to Third Point LLC's ("Third Point" or the "Investment Manager") new redemption policy for Third Point Offshore, Ltd. (the "Master Fund"), the fund into which TPIL invests.
Current market conditions have extended the expected timeline for private companies to list in the public markets. Considering this, Third Point has announced a change to its redemption policy to address the illiquidity of Legacy Private Investments[1] contained in its portfolio:
- Beginning June 30, 2023, redemptions from the Master Fund will be satisfied with (1) approximately 91% in cash, and (2) approximately 9% in a participation note ("Participation Note") representing the redeeming investor's pro rata share of the Master Fund's Legacy Private Investments as of June 30, 2023, and a small cash reserve.[2]
- It will be Third Point's priority to liquidate the Legacy Private Investments at appropriate levels as opportunities present themselves, and proceeds from these liquidations will be reinvested in the liquid portion of the Master Fund.
- In connection with the foregoing, holders of the Participation Notes will be subject to a management fee on the value of those notes at the same rate applicable to the interests being redeemed, but reduced by 0.50% per annum. For continuing investors in the Master Fund, the management fees charged with respect to their ownership of the Legacy Private Investments will similarly be reduced by 0.50% per annum (with no change to the management fees charged with respect to the rest of the portfolio). These changes will result in a small reduction in the current 1.25% management fee associated with TPIL shares.
In thinking about its fiduciary responsibility to current, redeeming, and future investors generally, the Investment Manager believes this redemption structure offers the most equitable outcome to its investor base in its entirety. While Master Fund redemptions for the upcoming quarter-end are within the typical range, Third Point considers it prudent to enact this policy at the current moment given the sustained unusual conditions in the macro, rates and IPO environments.
TPIL-related redemption requirements, including those associated with the ongoing share buyback programme and the potential tender offers in 2024 and 2027, will be subject to the new redemption policy.However, in order to satisfy TPIL's commitments in cash, a slightly higher redemption of Master Fund shares will be made. When such redemptions take place, they will result in the accretion of Participation Notes, which will modestly increase the Company's exposure to the Legacy Private Investments in the absence of liquidity events occurring within the Legacy Private Investments portfolio.
Rupert Dorey, Chairman of the Board, commented:
"The Board of TPIL acknowledges the measures and rationale taken by Third Point for amending the share structure and fee structure at the Master Fund. The separation of the liquid investments from the more illiquid private companies portfolio is a prudent measure that will ensure a more stable platform for investors while enhancing investor exposure to Third Point's core strategies and competencies.
"Importantly, the new structure will not impact materially on TPIL's ongoing share buyback programme or on the proposed share tenders in 2024 and 2027. Assuming flat performance, the exposure to private companies would expect to increase from around 9% of NAV to 12% in the event that the 2024 tender was fully subscribed and the current buyback facility was fully utilised."
- Ends -
Press Enquiries
Third Point Elissa Doyle, Chief Communications Officer and Head of ESG Engagement edoyle@thirdpoint.com Tel: +1 212-715-4907 | Buchanan Charles Ryland charlesr@buchanan.uk.com Tel: +44 (0)20 7466 5107 Henry Wilson henryw@buchanan.uk.com Tel: +44 (0)20 7466 5111 |
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 investment strategy. TPIL's assets under management are currently $600 million.
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 37-person investment team, a robust quantitative data and analytics team, and a deep, tenured business team. Third Point manages approximately $12.2 billion in assets for sovereign wealth funds, endowments, foundations, corporate & public pensions, high-net-worth individuals, and employees.
[1] Legacy Private Investments is defined as Private Investments (investments made by the Master Fund that are traditionally considered venture capital or private equity) other than those with ongoing capital contributions.
[2] The cash reserve will be used for fees and expenses, including management fees, costs related to currency hedging in respect of certain Legacy Private Investments and other applicable Fund operating expenses.
