Third Point, a New York-based investment advisor, released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. The Third Point Offshore Fund returned 1.2% net in the fourth quarter compared to a 7.5% return for the S&P 500 INDEX (TR) and a 9.9% return for the MSCI WORLD INDEX (TR). Defensive portfolio orientation, weakness in several large positions, and write-offs/ markdowns in crypto-related private investments impacted the fund’s performance in the quarter relative to indexes. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Third Point highlighted stocks like American International Group, Inc. (NYSE:AIG) in the fourth quarter investor letter. Headquartered in New York, New York, American International Group, Inc. (NYSE:AIG) is an insurance products provider. On February 13, 2023, American International Group, Inc. (NYSE:AIG) stock closed at $61.96 per share. One-month return of American International Group, Inc. (NYSE:AIG) was -2.85%, and its shares gained 2.62% of their value over the last 52 weeks. American International Group, Inc. (NYSE:AIG) has a market capitalization of $46.035 billion.
Third Point made the following comment about American International Group, Inc. (NYSE:AIG) in its Q4 2022 investor letter:
“Third Point initiated a position in American International Group, Inc. (NYSE:AIG) during the Fourth Quarter. AIG is a global P&C insurer that, until recently, held a life insurance subsidiary, Corebridge. AIG has undergone a massive overhaul since the global financial crisis. The current executive team, who started in 2017, has made significant progress turning around the P&C insurance operations that previously suffered from unprofitable underwriting, significant loss volatility, and inadequate reserving. Over the past five years, AIG has professionalized the underwriting team, meaningfully reduced gross limits, restructured its reinsurance programs, and pruned the portfolio for profitable growth. As a result, AIG’s P&C operations have gone from an unprofitable 117% combined ratio in 2017 to a 92% combined ratio in 2022 and have seen seven consecutive quarters of favorable reserve development.
Alongside the operational turnaround, c is repositioning itself as a pure-play P&C insurer via the IPO of Corebridge which was completed in September 2022. This is an important catalyst for the business. First, we expect that $11 billion of proceeds from the sell-down of AIG’s remaining Corebridge stake will be primarily redeployed towards share repurchases, resulting in an ability to buy back a quarter of the company over the next two years. Second, 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.
Today, AIG trades at 1.1x book value (excluding Corebridge) compared to pure-play global P&C insurance peers which trade at a 50% multiple premium. AIG’s strong fundamental operating results coupled with the catalysts following the separation of Corebridge position should help AIG close that substantial valuation discount.”
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American International Group, Inc. (NYSE:AIG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held American International Group, Inc. (NYSE:AIG) at the end of the third quarter, which was 44 in the previous quarter.
We discussed American International Group, Inc. (NYSE:AIG) in another article and shared FPA Crescent Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
