Sat. Nov 27th, 2021


Daniel Loeb’s Third Point made a profit of about $ 300 million on its stake in Rivian, one of several hedge funds that made big profits this month from the electric vehicle manufacturer’s turbocharged flotation.

Billionaire investor Loeb has made profits through a series of investments over the past year, including in his convertible notes, according to investor letters and a person with knowledge of the trade.

Rivian, which makes pickups and pickups and is backed by Amazon and Ford, shot up on its market debut this month, which made it a value larger than both Ford and General Motors, though it has not yet recorded any significant revenue.

Shares rose from their offer price of $ 78 to more than $ 170 last week, although they have since fallen back to $ 118, partly due to the news that Ford deleted plans to create an electric vehicle using technology developed by Rivian.

Other funds that have benefited from Rivian include Daniel Sundheim’s D1 Capital and Philippe Laffont’s Coatue Management, both of which invested in a $ 2.5 billion round of funding this summer, as well as Infinity Investment Partners in London.

Third Point, D1, Coatue and Infinity declined to comment.

Loeb, whose total profit on Rivian has not been previously reported, wrote in a recent investor letter that Third Point met with founder and CEO RJ Scaringe early last year and was “deeply impressed by his charismatic vision and approach to the design of a new type of car company ”.

Loeb also pointed to the support of Amazon, which ordered 100,000 commercial delivery vehicles from Rivian. “As Amazon seeks to become a dominant player in logistics while being carbon neutral, we believe Rivian will be their choice of an end-to-end fleet supplier,” he wrote.

Third Point, which has $ 20 billion in assets under management, invested $ 167m this summer in the company’s convertible notes, which were converted into shares at the time of the initial public offering, as well as two other investments, including around the time of the IPO.

Third Point wrote to investors on November 10, the day of the stock exchange, saying it had made a gross internal rate of return of 640 percent, an annual measure of performance favored by the private equity industry.

Mayfair-based Infinity Investment Partners, meanwhile, invested in Rivian for the first time in January and made a profit on its initial position of more than three times, according to a letter sent to investors last week. That equated to profits in the tens of millions of dollars, according to a person familiar with the position.

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“Rivian is in a unique position to become the key player in the automotive industry on both the passenger and commercial side,” Infinity wrote in its letter.

Loeb’s $ 300 million profit is the latest in a series of huge profits he has made from private companies that have come on the market.

His fund’s biggest winning position this year, accounting for about a quarter of gross profit, was Upstart Holdings, an artificial intelligence lending platform that floated at the end of last year and rose 400 percent this year. Its second biggest winner is cybersecurity firm SentinelOne, whose IPO was this summer.

In the first 10 months of this year, Third Point rose 35.7 percent, its best year of returns in more than a decade.

laurence.fletcher@ft.com



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