NEW YORK (Reuters) - Hedge fund manager Dan Loeb’s Third Point LLC took new equity stakes in Goldman Sachs Group Inc, Bank of America Corp, JPMorgan Chase & Co during the fourth quarter, according to regulatory filings on Friday, on a bet that interest rate hikes and operating leverage will jack up returns.
In a letter to his investors dated Feb. 1, and seen by Reuters, Loeb said banks will increase returns on equity by between 2 and 4.5 percentage points over the next two years “before tax cuts or deregulation is considered.”
Third Point bought 400,000 shares of Goldman Sachs; 17.5 million shares of Bank of America; and 5.3 million shares of JPMorgan Chase, the filings show.
The quarterly disclosures of manager stock holdings, known as 13F filings with the U.S. Securities and Exchange Commission, are always intriguing for investors trying to divine a pattern in what savvy traders are selling and buying.
But relying on the filings to develop an investment strategy comes with some peril because the disclosures are backward looking, coming out 45 days after the end of each quarter.
Still, the records offer a glimpse into what hedge fund managers saw as opportunities to make money on the long side. The filings do not disclose short positions, bets that a stock will fall in price. There is little disclosure on bonds and other securities that do not trade on exchanges.
Third Point also disclosed new share stakes in Zayo Group Holdings Inc, Honeywell International Inc, Anthem Inc and Time Warner Inc.
Third Point dissolved its stakes in Alibaba Group Holding Ltd and cut its stake in Apple Inc by 26 percent to 1.9 million shares, according to the regulatory filings.
Reporting by Jennifer Ablan; Editing by Leslie Adler