Major hedge funds like Millennium Management, Point72, and Third Point are expanding into private credit to diversify their offerings, target higher returns, and attract long-term capital, with new funds and strategies aimed at lending directly to businesses and competing with established private credit firms. This shift reflects a broader trend of asset managers displacing banks as lenders, amid intense competition and growing market interest, with projections suggesting the private credit market could reach $3 trillion by 2028.
Hedge fund mogul Dan Loeb's activist hedge fund Third Point, which owns a majority stake in R2 Semiconductor, is funding a patent fight against Intel, Dell, Amazon, and other tech giants over chip designs. R2 has been successful in obtaining injunctions against Intel's chip sales in Europe, and Third Point is also funding new lawsuits against Amazon Web Services and Fujitsu. The legal battle revolves around a patent related to voltage regulation in semiconductors, with Third Point investing in R2's legal costs and planning to put up $79 million in escrow for ongoing court fights in Germany.
Ousted WeWork CEO Adam Neumann, through his new venture Flow Global Holdings, is attempting to buy back the company, accusing WeWork of rebuffing his efforts to purchase or provide funds. Neumann and Flow are reportedly partnering with capital sources, including Dan Loeb's Third Point hedge fund, to obtain funding for the deal. WeWork, currently in bankruptcy, has stated that it receives expressions of interest from external parties regularly and is focused on addressing its unsustainable rent expenses and restructuring its business. Third Point has confirmed preliminary talks with Neumann and Flow but has not committed to any transaction at this point.
Third Point, the hedge fund founded by Daniel Loeb, has taken new positions in Alphabet, Alibaba, Advanced Micro Devices, Micron Technology, and Salesforce during Q1 2023, while exiting positions in SentinelOne, Fidelity National Information Services, and Walt Disney. The firm also increased its stakes in Dupont De Nemours and Hertz Global Holdings.
