Daniel S. Loeb
|Daniel Seth Loeb|
|Born||December 18, 1961|
|Residence||New York City, U.S.|
|Alma mater||Columbia University (B.A.)|
|Occupation||Hedge fund manager|
|Known for||Third Point LLC|
|Net worth||US$ 1.5 billion (March 2013)|
|Spouse(s)||Margaret Davidson Munzer (m. 2004)|
|Parents||Ronald Loeb and Clare Spark|
Daniel Seth Loeb (born December 18, 1961) is an American hedge fund manager. He is the founder and chief executive of Third Point LLC, a New York-based hedge fund with a portfolio worth $14 billion.
New York Magazine has noted that Loeb's “preferred strategy” is to buy into troubled companies, replace inefficient management, and return the companies to profitability, which “is the key to his success.” As of early 2013, Loeb's personal net worth was $1.5 billion. “The only thing I care about,” he has said, “is making money for my investors.”
Loeb, the son of Ronald and Clare Spark Loeb, grew up in Santa Monica, California and attended Palisades Charter High School. At the school, he took AP classes, started a skateboard company and was nicknamed “Milo Minderbinder” by one of his teachers (after a character in the novel Catch-22 who had a fascination with the stock market.) His father was a partner at the Los Angeles law firm of Irell & Manella LLP and general counsel for Williams-Sonoma. His mother is a historian. Loeb’s great-aunt, Ruth Handler, created the Barbie doll and co-founded Mattel Inc. In 2009, Loeb told an audience “[I] associated success in business with Hot Wheels and Barbie dolls. I think it was a very powerful enforcer early on to like business.”
Loeb attended the University of California at Berkeley for two years and subsequently graduated from Columbia University with an economics degree. By his senior year at Columbia, he had made $120,000 in the stock market, but lost it all on an investment in a firm called Puritan-Bennett Inc. The loss taught him a lesson, he later said, in “overconcentrating positions.”
Loeb worked at Warburg Pincus, a private equity firm, from 1984 to 1987. He was next employed as director of corporate development at Island Records, a record label, where he focused on securing debt financing.
After Island Records, Loeb worked as a risk arbitrage analyst at Lafer Equity Investors and then, from 1991 to 1994, as senior vice-president in the distressed debt department at Jefferies LLC. At Jefferies, he focused on bankruptcy analysis, trading bank loans and selling distressed securities. He moved on to become a Citigroup vice president from 1994 to 1995, in charge of high-yield bond sales.
Third Point Management
On Wall Street, Loeb has a reputation for "financial savvy" and for "his withering criticism of corporate executives who are unfortunate enough to stumble in his sights." One of Loeb's signature tactics involves letter-writing
Loeb is well known in Hedgeworld for his attacks on what he views as greedy execs who also happen to be depressing shareholder value. Of shares he owns. "The moral-indignation business," Loeb sometimes calls it.
Hedge-fund guys love to read Loeb’s attacks; "he articulates what people feel," says one.
Often, these letters cite the results of investigations he has ordered, detailing management decisions and actions he considers detrimental to shareholder value. Usually, the letters accompany his government filings. Loeb once spent more than $4 million to increase his stake in a company to more than 5%, the statutory threshold requiring investor filings with the SEC, in order to file one of his letters criticizing the firm's management. According to New York Magazine, “Loeb is proud of his letters, which are thorough, well argued, and filled with clever turns of phrase. (He had a batch prepared for his high-school English teacher.)” A 2005 New Yorker “Talk of the Town” item described him as “a kind of investor's H. L. Mencken.”
In a 2005 letter responding to a job inquiry by a U.K. fund manager, for example, Loeb bristled at the applicant's reference to his (the applicant's) “place in society,” telling the applicant that he would “have plenty of time to discuss your 'place in society' with the other fellows at the club.” At Third Point, Loeb explained, “'one's place in society' does not matter at all. We are a bunch of scrappy guys from diverse backgrounds (Jewish, Muslim, Hindu etc) who enjoy outwitting pompous asses like yourself in financial markets globally.” Similarly, in a September 2005 letter, Loeb told Ligand Pharmaceuticals CEO David Robinson that he was “the worst CEO in biotech,” and expressed wonder that Ligand's board of directors had not shown Robinson “the door long ago - accompanied by a well worn boot planted in the backside.”
Loeb sent a letter to John Collins, chairman and CEO of InterCept, in 2004, accusing InterCept of following “a 'good ol' boy' ('GOB') set of ethics.” Loeb pointed out that InterCept employed Collins's daughter and son-in-law, the latter of whom Loeb had recently reached by phone on the golf course during working hours. Loeb further noted his discovery that InterCept leased a jet from a partnership controlled by Collins and another board member.
Loeb wrote a letter to Irik Sevin, CEO of Star Gas Partners, in February 2005, calling him “one of the most dangerous and incompetent executives in America” and accusing him of “ineptitude” and of using the firm as his “personal 'honey pot.'” He wrote: “I was amused to learn, in the course of our investigation, that at Cornell University there is an 'Irik Sevin Scholarship.' One can only pity the poor student who suffers the indignity of attaching your name to his academic record.” Loeb demanded the resignation from the firm's board of Sevin's “elderly 78-year old mum” and insisted that Sevin also “step down...so that you can do what you do best: retreat to your waterfront mansion in the Hamptons where you can play tennis and hobnob with your fellow socialites.” A 2005 New York Times article, reported that many hedge-fund managers were now writing letters to the SEC demanding that executives take specific actions, cited Loeb's letter to Sevin as exemplary of the genre, noting that three weeks after the letter was sent, “Sevin was gone, and a jubilant Mr. Loeb sent out an e-mail message to friends and associates declaring a 'huge victory for Third Point.'”
Scott Thompson and Yahoo
In 2012, Loeb, who through Third Point LLC held 5.8% of Yahoo! stock, sought seats on the Yahoo! board for himself, former NBC Universal CEO Jeff Zucker, former Goldman Sachs executive Harry Wilson and former MTV Networks executive Michael J. Wolf. On May 3, 2012, Loeb revealed that the new CEO of Yahoo!, Scott Thompson, did not have a computer science degree, as had been commonly assumed for many years. Thompson resigned on May 13, 2012. Reuters then announced that Loeb, Wilson and Wolf would become members of the Yahoo! board.
Sony and George Clooney
In May 2013, Loeb proposed splitting Sony's entertainment and electronics businesses, arguing that such a split would increase profits. On June 18, 2013, Third Point LLC announced that it had increased its stake in Sony to 70 million shares, or about 7 percent, valued at $1.4 billion. According to Bloomberg.com, Sony's board of directors is considering Loeb's proposal and has hired Morgan Stanley and Citigroup, Inc. to evaluate it. Actor George Clooney, whose Smokehouse Pictures production company has a contract with Sony's entertainment division, has publicly opposed the proposal.
The Daniel S Loeb Family Third Point Foundation earned $6.39 million in profits in 2011 and had $4.45 million in assets at the end of that year, making it one of the largest and highest-earning private foundations. Its nonprofit administrative expense ratio, a measure of its operating and administrating expenses, was 0.44%, compared to the 2011 average of 19.7% for all private foundations.
Loeb is chairman of the board of Success Academies Charter Schools in Brooklyn. He endowed the Daniel S. Loeb Scholarship for undergraduate study at Columbia University. Since 2004, he has been a trustee of Prep for Prep, an organization in New York City that prepares underprivileged children to attend competitive private schools. He is also active in the Jewish Enrichment Center, which provides young people with an education in Judaism. Additionally, he is a co-founder of Students First New York, the state branch of the national education advocacy organization.
Loeb is co-chair of the Governors for Investors Industry for 2013. He is a trustee of Mount Sinai Hospital (Manhattan, New York), the Manhattan Institute, the U.S. Olympic Committee and the Los Angeles Museum of Contemporary Art. He is also a member of the Council on Foreign Relations and of the National Council of the American Enterprise Institute.
On February 20 2014, Loeb attended a discussion between the American Enterprise Institute and the Dalai Lama. The two worldviews debated the morality of capitalism and free enterprise. In Loeb's presentation, he said he practices Ashtanga yoga and applies yoga principles to his business and his decision-making. He also noted that these principals aided in his decision to donate to a charter school in the Bronx, now ranked third in the state of New York.
Loeb has donated to the Democratic Senatorial Campaign Committee, Friends for Harry Reid, Obama for America, Every Republican is Crucial PAC, Forward Together PAC, Prosperity PAC, Straight Talk America, and to the Volunteer PAC.
Honors and awards
Loeb was recognized by New York Governor Andrew Cuomo in 2011 for his role in advocating for marriage equality legislation in New York State. In 2012 he was presented by Columbia University with the John Jay Award for distinguished professional achievement.
Loeb and his wife are avid art collectors who have frequently appeared on Art News's annual list of 200 top art collectors. Art News describes them as specializing in postwar and contemporary art and in “feminist art.” “Loeb is a prominent art collector and the walls at his Park Avenue office are covered with paintings,” according to a 2013 article in the New York Times. At a Sotheby's auction in 2009, Manhattan dealer Larry Gagosian purchased Jeff Koons’s “Baroque Egg With Bow (Turquoise/Magenta)” for $5.4 million from Loeb, who had bought it from the Gagosian Gallery in 2004 for about $3 million.
Loeb has traced his love of art to his student years at Columbia, when he saw Poussin's “Rape of the Sabine Women” at the Metropolitan Museum of Art and took an art humanities class as part of the core curriculum. The “prep school kids” treated him as a “jerk,” thinking they “all knew so much more,” but in the end “I got one of two A's, and all the prep school snotty kids didn't.”
Business Insider placed Loeb at the top of its list of “Wall Street's 25 Most Serious Art Collectors,” noting that he owns works by Richard Prince, Basquiat, Andy Warhol, Mike Kelley and Cindy Sherman, and that he “has his own curator.”
Loeb married Margaret Davidson Munzer on July 4, 2004, in a service held at his beach house in East Hampton, New York. Loeb is a founding "Master Player" of Portfolios with Purpose, an annual virtual stock trading contest that raises money for charitable causes of the winning contestants' choice. He has called himself a "lifelong surfer" with "a 'secret spot' in the Caribbean." His second favorite surfing spot is in Indonesia. Third Point takes its name from "a break at Malibu's Surfrider Beach."
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