LAS VEGAS — To many Americans, the billionaire investor Warren E. Buffett is the “Oracle of Omaha.” To another billionaire investor, Daniel S. Loeb, he is a hypocrite.
Mr. Loeb, who runs the $17.4 billion hedge fund Third Point, told an audience of hedge fund faithful on Wednesday that Mr. Buffett “has a lot of wisdom, but I think we need to be aware of the disconnect between his wisdom and how he behaves.”
He was taking aim at a public bet that Mr. Buffett made against the hedge fund industry, which Mr. Buffett believes cannot outperform the broader market and, specifically, the Standard & Poor’s 500-stock index.
Speaking to shareholders at an annual gathering for his company Berkshire Hathaway over the weekend, Mr. Buffett pointed out that the S.&P. 500 had gained 63.5 percent since 2008, while an index of hedge funds had increased by 19.6 percent over the same period.
On Wednesday, Mr. Loeb used his one-on-one interview at the SkyBridge Alternatives Conference, or SALT, to retaliate.
“I love reading Warren Buffett’s letters and I love contrasting his words with his actions,” he began. Lest anyone think it was a put-down, he quickly added, “He’s a very wise guy.”
But wise or not, Mr. Loeb had a few critical things to say about Mr. Buffett. “I love how he criticizes hedge funds, yet he had the first hedge fund,” Mr. Loeb said. “He criticizes activists, he was the first activist. He criticizes financial services companies, yet he loves to invest in them. He thinks that we should all pay taxes, yet he avoids them himself.”
To this, the audience erupted in laughter.
An activist investor, Mr. Loeb is known for his pithy takedowns of corporate boards of companies in which he has taken a large stake. He uses sharp language to chastise corporate chieftains.
Separately during the same interview on Wednesday, Mr. Loeb acknowledged that his experience as an activist in other parts of the world, like Japan, was humbling. He praised Japan’s prime minister Shinzo Abe for putting in place reform that encourages corporate reform.
Mr. Loeb also took some credit for Mr. Abe’s move and said he had personally made progress in his most recent activist position in Fanuc, the Japanese robot maker. He told the audience, filled with hedge fund managers and financial advisers taking notes, that two weeks ago he had a meeting with the board of Fanuc. Several days ago, the company promised to double its dividend payout.
“Nobody thought this could be done,” Mr. Loeb said.
Mr. Loeb recounted how, after the move, the chief executive of Fanuc approached him to give him one message: “Just letting you know, we’re not doing a lot of these things because you told us to.”
Source: Daniel loeb strikes back against buffetts criticism of hedge funds
Mr. Loeb, who runs the $17.4 billion hedge fund Third Point, told an audience of hedge fund faithful on Wednesday that Mr. Buffett “has a lot of wisdom, but I think we need to be aware of the disconnect between his wisdom and how he behaves.”
He was taking aim at a public bet that Mr. Buffett made against the hedge fund industry, which Mr. Buffett believes cannot outperform the broader market and, specifically, the Standard & Poor’s 500-stock index.
Speaking to shareholders at an annual gathering for his company Berkshire Hathaway over the weekend, Mr. Buffett pointed out that the S.&P. 500 had gained 63.5 percent since 2008, while an index of hedge funds had increased by 19.6 percent over the same period.
On Wednesday, Mr. Loeb used his one-on-one interview at the SkyBridge Alternatives Conference, or SALT, to retaliate.
“I love reading Warren Buffett’s letters and I love contrasting his words with his actions,” he began. Lest anyone think it was a put-down, he quickly added, “He’s a very wise guy.”
But wise or not, Mr. Loeb had a few critical things to say about Mr. Buffett. “I love how he criticizes hedge funds, yet he had the first hedge fund,” Mr. Loeb said. “He criticizes activists, he was the first activist. He criticizes financial services companies, yet he loves to invest in them. He thinks that we should all pay taxes, yet he avoids them himself.”
To this, the audience erupted in laughter.
An activist investor, Mr. Loeb is known for his pithy takedowns of corporate boards of companies in which he has taken a large stake. He uses sharp language to chastise corporate chieftains.
Separately during the same interview on Wednesday, Mr. Loeb acknowledged that his experience as an activist in other parts of the world, like Japan, was humbling. He praised Japan’s prime minister Shinzo Abe for putting in place reform that encourages corporate reform.
Mr. Loeb also took some credit for Mr. Abe’s move and said he had personally made progress in his most recent activist position in Fanuc, the Japanese robot maker. He told the audience, filled with hedge fund managers and financial advisers taking notes, that two weeks ago he had a meeting with the board of Fanuc. Several days ago, the company promised to double its dividend payout.
“Nobody thought this could be done,” Mr. Loeb said.
Mr. Loeb recounted how, after the move, the chief executive of Fanuc approached him to give him one message: “Just letting you know, we’re not doing a lot of these things because you told us to.”
Source: Daniel loeb strikes back against buffetts criticism of hedge funds
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