March 1st, 2010Dear Investor:During the Fourth Quarter of 2009 and for the year, Third Point produced the following net returns:
2009 Annual Performance
26.5% 20.4%2009 Fourth Quarter
6.0% 4.9%Annual Standard Deviation
16.4% 6.4%Monthly Correlation to S&P
The top winners for the quarter were Delphi Corp, Dana Holding, Chrysler, Health Net Inc.,and General Growth Properties. The top losers for the quarter were Barclays, PHH, Fortis,Short Financial A, and Punch Taverns.Firm assets under management at January 1, 2010 were $2.5 billion.
Performance for the quarter was driven primarily by gains in post‐reorganization equities,distressed credit, mortgage bonds, and equity investments in health care companies.The following is a brief discussion of selected positions that impacted the portfolio duringthe fourth quarter.
CIT Group Inc. filed a “pre‐arranged” Chapter 11 reorganization plan on November 1, 2009after several months of planning and negotiations with key creditor constituents. Thebankruptcy filing was necessitated by CIT’s inability to fund significant debt maturities dueto the dislocation in the credit markets and the lack of government support via TLGP, whichthe company had hoped in vain would be forthcoming in July 2009. We had beenmonitoring the situation, and the Chapter 11 filing provided us with an opportunity to