Third Point’s Dan Loeb makes a number of changes to his portfolio, including adding an insurer

Third Point’s Dan Loeb made a slew of moves to his portfolio last quarter, including building a new stake in a big insurer. The hedge fund manager said he initiated a position in insurance company AIG in the fourth quarter, according to an investor letter obtained by CNBC. Loeb said the company has undergone a massive overhaul since the financial crisis and is well positioned for profitable growth. Loeb said AIG has transformed into a property and casualty insurance pure play after the IPO of its retirement arm Corebridge Financial in September. “This is an important catalyst for the business,” Loeb said. “There is an opportunity to streamline the corporate expense base with the simplification of AIG’s business as AIG no longer operates within the conglomerate structure that historically governed its operations.” The stock fared well last year with a 11% gain even though the broader market suffered a sell-off amid rising rates. AIG 1Y mountain AIG Meanwhile, Loeb said he added to his Bath & Body Works position significantly last quarter. He has been pushing for board changes to improve governance issues. The manager first took a stake in the retailer in the third quarter of 2022. The stock fell nearly 40% last year as the retailer struggled to get its footing after L Brands spun off Victoria’s Secret from Bath & Body Works in August 2021. Loeb said the company was challenged by the normalization of trends following the pandemic, but also suffered from execution hiccups that made matters worse. “Despite these recent struggles, we believe BBWI can change its equity story, improve its earnings power, and earn a more premium valuation,” Loeb said. “The recent appointment of a new CEO, Gina Boswell from Unilever, is an encouraging first step.” Loeb also increased his holding in chemicals company DuPont last quarter, following the divestment of Mobility & Materials, which he said was its most cyclical and lowest margin business segment. Shares of DuPont have gained nearly 14% this year alone following a 15% pullback last year. “We expect the combined catalysts of increased Page 7 share repurchases, the pending resolution of legal claims, and the new business structure to drive meaningful value for shareholders,” Loeb said. Overall, Third Point’s flagship offshore fund lost 21.8% last year, trailing the S & P 500. The manager said the underperformance was largely due to the defensive portfolio orientation, weakness in several large positions, and write-offs and markdowns in crypto-related private investments. — CNBC’s Michael Bloom contributed reporting.

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