Third Point up 9 percent in first quarter, fueled largely by Nestle gains

BOSTON (Reuters) – Third Point LP returned 9 percent in the first quarter of 2019 fueled largely by gains at Nestle, which was publicly critiqued by the hedge fund in 2018 for its “muddled strategic approach,” an investor said.

The Swiss-based food giant, maker of KitKat bars and Perrier water, contributed 1.5 percent in gains to $14 billion Third Point’s portfolio during the first three months of the year, the investor said. Nestle has gained 19.54 percent since January.

Third Point, which includes activism in its lineup of investment strategies, took a roughly $3 billion stake in Nestle in 2017 with an eye to pushing the company to perform better. It watched quietly from afar until last summer when the firm’s billionaire founder Daniel Loeb publicly told executives to be “sharper” “bolder” and “faster” in spinning off businesses and untangling the company’s complex management structure.

Since then Third Point has taken on a more muted posture, saying in its fourth quarter shareholder letter that “it’s becoming increasingly clear that real change is underway in Vevey,” where Nestle is based. Privately the firm is clearly supportive of CEO Mark Schneider’s moves with some people saying the relatively new leader is doing things the right way.

For Third Point and its clients, this year’s early gains are a salve after last year’s 11 percent drop, which was only the second double digit decline in the firm’s 24 year history.