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That company will then be in a position to do more reinsurance deals, issue primary annuities.
They really pushed back on everything that we recommended. It took them about five years. And I think one by one, they've done many of the things. They've broken out the semi-business. They partially spun out or they plan to spin out their financial services business.
The first time we invested in it, it was basically a conglomerate. It had obviously the main Sony studios. It had a semiconductor business, a life insurance business, obviously had all the consumer electronics. So we advised them to separate these businesses, certainly at a minimum, take out the insurance business, which had no place in it.
At one point, we owned 7% of Sony.
The story went everywhere and ended up being a really good investment.
It happened to Meta a couple of years ago. They put up a good quarter. Stock went up. It was like Wile E. Coyote. There was no one else to buy the stock. It tanked.
I think the setup's great. You can still buy NVIDIA, maybe the multiple slightly higher right now, but there's such a catch-up trade in NVIDIA at 15 times 27, 12 times 28 for the most dominant, very fast growing company at its size. I looked through our whole semis, cap equipment, hyperscaler portfolio, and I thought my instinct was going to be, okay, we've got to take profits here. I looked at the valuations. I looked at their growth rates. Unless you are really draconian or negative and you th
In the same way that NVIDIA after Q1 three years ago had this monster quarter, people piled on, it kept going up. You had a couple of quarters in a row where it put up solid numbers, then shockingly good numbers, and the stock tanked.
But we also put the equity of that business in things like the junior tranches of structured financings. But we'll also be using it for growth equity investments.
Third Point manages the money in private credit, structured credit, whole loan mortgages, some direct lending in real estate, some investment-grade corporate debt, and private investment-grade.
That company will then be in a position to do more reinsurance deals, issue primary annuities.
We merged our reinsurance company into a closed-end fund that we had in the UK, Third Point Offshore Investors. We reincorporated that business from Guernsey to Cayman, and we repurposed it from a closed-end investor in my hedge fund into an insurance company.
The problem is the annuity business, though, it can't invest in the hedge fund. It can only do credit.
we had the right idea, but we had the wrong insurance vehicle.
We had some good years at Third Point, but we were like scrambling to offset the losses from the insurance company.
The problem was that the reinsurance business took a sharp turn for the worse.
We will invest the float all in Third Point and in Treasury.
I'm the portfolio manager of the hedge fund, but private credit, CLOs, structured credit, a high yield business, they all have their own PMs.
We were comfortable enough with the underlying value of the business and with the fundamentals that we made that, at that time, our largest credit position.
I think it's the most attractive sector right now. It's where the bulk of our capital is invested.
First of all, third point is a whole collection of businesses. My main focus is on the hedge fund strategy, which started at $3 million. It's now about $9 billion today. That fund itself is about 30% credit in total.
The real opportunity today is understanding those types of opportunities and looking for something that combines that with a business quality lens. So let's talk about how my business evolved and how we evolved.
But now Third Point is a much bigger, broader, more diversified collection of $25 billion or so of assets.