Daniel Loeb’s Third Point made about $300 million from his stake in Rivian, one of a number of hedge funds that made big profits from the electric-car maker’s rise this month.
Billionaire investor Loeb has made a profit through a range of investments over the past year, including convertibles, according to the investor’s letter and a person with knowledge of trading. Translate.
Rivian, which makes pickup trucks and vans and is backed by Amazon and Ford, fly up to the market this month, giving it a value larger than both Ford and General Motors, although it has yet to record any meaningful revenue.
Shares rose from their asking price of $78 to more than $170 last week, though they have since fallen back to $118, in part due to news that Ford had leave plans to create an electric vehicle using technology developed by Rivian.
Among other funds that have benefited from Rivian are Daniel Sundheim’s D1 Capital and Philippe Laffont’s Coatue Management, both of which invested in a $2.5 billion funding round this summer, as well as Infinity Investment Partners whose headquarters in London.
Third Point, D1, Coatue and Infinity declined to comment.
Loeb, whose total return from Rivian was previously unreported, wrote in a recent investment letter that Third Point met founder and chief executive officer RJ Scaringe early last year and was “impressed profound by his vision and charismatic approach to designing a kind of car company”.
Loeb also pointed to Amazon’s backing, which has ordered 100,000 commercial delivery vehicles from Rivian. “As Amazon seeks to become the dominant player in logistics while remaining carbon neutral, we believe Rivian will be their end-to-end fleet supplier,” he wrote.
Third Point, which has $20 billion in assets, this summer invested $167 million in the company’s convertible bonds, which convert to stock at the time of its initial public offering. them, as well as two more investments, including around the time of the IPO.
Third Point wrote to investors on November 10, the day of the fame, to say that it has generated a total internal rate of return of 640%, an annual performance measure approved by the industry. favored by the private equity industry.
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Meanwhile, Mayfair-based Infinity Investment Partners made its first investment in Rivian in January and has already achieved a return on the original position more than three times, according to a letter sent to investors this week. prior to. That equates to a profit of tens of millions of dollars, according to a person familiar with the position.
“Rivian is in a unique position to become a key player in the automotive industry both in passenger and commercial terms,” Infinity wrote in its letter.
Loeb’s $300 million profit is the latest in a series of big gains he’s made from private companies already on the market.
His fund’s biggest winner this year, which accounts for about a quarter of total returns, is Upstart Holdings, an artificial intelligence lending platform that floated late last year and is up 400% this year. The second big winner is cybersecurity firm SentinelOne, which went public this summer.
In the first 10 months of this year, Third Point is up 35.7%, its best year in more than a decade.