In the crowded landscape of London-listed investment trusts, few have faced as sustained a campaign of activist pressure as Third Point Investors Limited (TPIL). It’s a case study in the difference between chasing short-term gains and building long-term value.
Asset Value Investors (AVI) and its lead agitator, Tom Treanor, have pursued TPIL for over six years, demanding liquidation or discount‑narrowing mechanisms. Their goal is transparent: To force liquidation or tenders for quick gains.
But hedge fund manager Daniel Loeb and the TPIL board have offered a far more constructive—and potentially lucrative—alternative. Activists in the closed‑end fund arena often target investment vehicles trading at a discount to net asset value (NAV). When a fund trades at a 20 percent discount, a forced liquidation (assuming the underlying assets are sufficiently liquid) can deliver a quick 25 percent return. TPIL, a London-listed feeder fund into Third Point’s hedge fund, has traded at such levels for years.
AVI’s strategy—backed by campaigns, shareholder resolutions, board nominations (including AVI representative Richard Boleat in 2022), and even calls to oust Joshua Targoff, Loeb's representative on the Board—has been to apply relentless pressure in the hopes of causing the Board to capitulate and wind down the fund (although Third Point’s fund is not completely liquid).
The board yielded to some of these demands, putting Boleat on the Board in 2022, and announcing two NAV tenders for 25 percent of the Fund in both 2024 and 2027. However, after incremental agitation from AVI and others the Board in 2024 established a Strategy Committee (comprising two new independent directors and Boleat), which was tasked with exploring options to enhance shareholder value.
This committee—catalyzed in part by activist pressure—ultimately produced an outcome superior to liquidation. In May, the TPIL board, following advice from Jefferies and other advisers who deemed the transaction “fair and reasonable,” approved an all‑share acquisition of Malibu Life Reinsurance, a Cayman-listed insurer founded by Third Point, on a book‑for‑book basis, and further signaled a pending $75 million tender at 87.5 percent of NAV (approximately 20 percent of the outstanding shares not owned by Loeb).
This deal would make TPIL the first new London-listed insurer since 2020—an asset class that generally commands premiums over book value. It offers shareholders the opportunity to participate in the booming U.S. fixed‑annuity market by partnering with a well-respected asset manager which has grand plans to grow Malibu into a meaningful competitor in the space. Malibu already has a $3 billion treaty with a well-respected annuity writer, and potential other arrangements being sourced by Third Point.
Recent rule changes on related-party transactions by the U.K.’s financial regulator allow Loeb to vote his 25 percent stake—the largest single holding—in favor of the transaction. The Board has been chastised by some dissenters for “allowing” Mr. Loeb to vote, but in reality this change in law empowered TPIL to be creative and propose a deal that it believes is superior to activist calls for liquidation.
Predictably, AVI slammed the deal as “odious” and an affront to minority shareholders, but its "poor governance" narrative ignores some key facts. For starters, the strategy committee that approved the transaction included Boleat—AVI’s own board nominee. What’s more, independent financial advisers—including Jefferies—reviewed the proposal and affirmed that it was fair and reasonable for shareholders.
The deal suggested that TPIL’s discount to NAV was largely a function of structural inefficiencies common to listed funds—issues that this new strategy seeks to overcome rather than replicate. Moreover, for shareholders unhappy with the direction, the deal offered investors a substantial tender offer at a meaningful premium to the unaffected stock price prior to the announcement.
Critics also overlook TPIL’s upside potential. Reinsurance is a growth industry, especially in the fixed annuities niche. When the transaction was announced, Saba Capital’s Boaz Weinstein noted that it creates a “clear path to value creation” amid broader investment‑trust woes.
This transaction embodies disciplined stewardship. Loeb, the founding manager of Third Point and long-time TPIL shareholder, collaborated with an independent board to deliver a strategy that avoids capitulation to activist demands, offers optional liquidity, and—crucially—sets a pathway for a higher return on equity, which should be the primary duty of board members.
AVI and Treanor’s pressure produced concessions (tenders, board seats), but they fell short of their ultimate prize of compelling liquidation—and now they bristle at the board’s superior alternative.
Activists are also demanding a full NAV exit for all shareholders. This is tantamount to a call for liquidation—the very outcome the independent board rejected. A forced liquidation would likely leave behind a rump of complex, esoteric, and illiquid assets, and would fail to exploit the strategic benefits of a listed insurer.
TPIL’s story is a textbook example of activist pressure sparking a better outcome—not destruction. AVI’s activism yielded board representation and formal review. The Board responded not with stubbornness but creativity—a well-governed pivot preserving optionality, providing liquidity, and potentially unlocking a new valuation multiple. Directors discharging their fiduciary duties are supposed to do exactly what the TPIL board did—consider all of the alternatives and make a reasoned decision based upon the facts and circumstances and professional advice.
Activism can be a spark, and good governance can improve decision making. While activists may have wanted an easy cash-out, it appears that the TPIL board is fulfilling their proper fiduciary duty to build sustainable value.
