credit suisse asset management investor presentation

You are about to change the origin location from where you are visiting Credit-suisse.com.

*The location of origin is defined in your browser settings and may not be identical with your citizenship and/or your domicile.

• Contact & Support

Private Clients

Recent searches

You are about to change your browser's location settings for credit-suisse.com. For the most relevant services and products, choose your regional site.

Our annual reports

On this page you will find the annual reports of Credit Suisse Group AG and the Credit Suisse AG (Bank), as well as Sustainability Reports available for download.

Annual Report – Credit Suisse AG (Bank)

Prior to the transaction, Credit Suisse Group AG owned 100% of Credit Suisse AG (Bank), the principal operating subsidiary. The Bank's annual report is combined with the annual report of the Group and includes the consolidated and parent company financial statements of the Bank.

• 2023 Annual Report (PDF)
• 2023 Consolidated financial statements – Credit Suisse (PDF)
• 2023 Parent company financial statements – Credit Suisse (PDF)

Sustainability Report - UBS Group AG

• 2023 UBS Sustainability Report (PDF)

Annual Reports

Annual report – credit suisse group ag.

Consolidated financial statements, Information on the company, Operating and financial review, Treasury and risk management, Corporate governance and Compensation.

• 2022 Annual Report (PDF)
• 2022 Annual Report – Compensation (PDF)

Prior to the transaction Credit Suisse Group AG owned 100% of Credit Suisse AG (Bank), the principal operating subsidiary. The Bank's annual report is combined with the annual report of the Group and includes the consolidated and parent company financial statements of the Bank.

• 2022 Consolidated financial statements – Credit Suisse (PDF)
• 2022 Parent company financial statements – Credit Suisse (PDF)

Sustainability Report

The Sustainability Report shows how Credit Suisse’s commitments and aspirations in sustainability are put into practice as a key component of the bank’s operations. The report provides an overview of its principal activities and milestones in this field. The Task Force on Climate-related Financial Disclosures (TCFD) Report provides a summary of our progress toward our climate ambitions and highlights the actions that Credit Suisse is taking on what is a multi-year journey.

• 2022 Sustainability Report (PDF)
• Task Force on Climate-related Financial Disclosures (TCFD) Report (PDF)
• Environmental Operational Data Disclosure  (PDF)
• 2021 Annual Report (PDF)
• 2021 Annual Report – Compensation (PDF)
• 2021 Consolidated financial statements – Credit Suisse (PDF)
• 2021 Parent company financial statements – Credit Suisse (PDF)

The Sustainability Report shows how Credit Suisse’s commitments and aspirations in sustainability are put into practice as a key component of the bank’s operations. The Report provides an overview of its principal activities and milestones and includes enhanced disclosures regarding the TCFD (the Task Force on Climate-related Financial Disclosures) recommendations and, for the first time, select SASB (Sustainability Accounting Standards Board) disclosures.

• Sustainability Report (PDF)
• Sustainability Report (Online Report)
• Environmental Performance Data for In-House Operations (PDF)
• 2020 Annual Report (PDF)
• 2020 Annual Report – Compensation (PDF)
• Update to the 2020 Compensation Report (PDF)
• 2020 Consolidated financial statements – Credit Suisse (PDF)
• 2020 Parent company financial statements – Credit Suisse (PDF)
• 2019 Annual Report (PDF)
• 2019 Annual Report – Compensation (PDF)
• 2019 Consolidated financial statements – Credit Suisse (PDF)
• 2019 Parent company financial statements – Credit Suisse (PDF)

Corporate Responsibility

The Corporate Responsibility Report describes how Credit Suisse Group assumes its various responsibilities in banking, in the economy and society, as an employer and towards the environment.

• Corporate Responsibility Report (PDF)
• Corporate Responsibility Report (Online Report)

The publication "Corporate Responsibility – At a glance" provides an overview of the most important processes and activities that reflect our approach to corporate responsibility in banking, in the economy and society, as an employer and for the environment. In addition, it contains the cornerstones of our strategy and the key figures for the financial year 2019.  

• Corporate Responsibility – At a glance (PDF)
• 2018 Annual Report (PDF)
• 2018 Annual Report – Compensation (PDF)
• 2018 Consolidated financial statements – Credit Suisse (PDF)
• 2018 Parent company financial statements – Credit Suisse (PDF)

The publication "Corporate Responsibility – At a glance" provides an overview of the most important processes and activities that reflect our approach to corporate responsibility in banking, in the economy and society, as an employer and for the environment. In addition, it contains the cornerstones of our strategy and the key figures for the financial year 2018.  

• 2017 Annual Report  (PDF)
• 2017 Annual Report – Compensation  (PDF)
• 2017 Annual Report (PDF)
• 2017 Consolidated financial statements Credit Suisse  (PDF)
• 2017 Parent company financial statements – Credit Suisse  (PDF)

The publication "Corporate Responsibility – At a Glance" provides an overview of the most important processes and activities that reflect our approach to corporate responsibility in banking, in the economy and society, as an employer and for the environment. In addition, it contains the cornerstones of our strategy and the key figures for the financial year 2017. 

• Corporate Responsibility – At a Glance  (PDF)
• Environmental Performance Data for In-House Operations  (PDF)

Company Profile

A summary of key financial figures and strategic information.

• 2016 Company Profile  (PDF)

Consolidated financial statements, Information on the company, Operating and financial review, Treasury and risk management, Corporate governance and Compensation .

• 2016 Annual Report  (PDF)
• 2016 Annual Report – Compensation  (PDF)
• Letter to Shareholders from the Chairman of the Compensation Committee, April 18, 2017  (PDF)
• 2016 Consolidated financial statements – Credit Suisse  (PDF)
• 2016 Parent company financial statements – Credit Suisse  (PDF)

Our report shows how we assume our social and environmental responsibilities.

• Corporate Responsibility Report  (PDF)
• 2015 Company Profile  (PDF)
• 2015 Annual Report  (PDF)
• 2015 Annual Report – Compensation  (PDF)
• 2015 Annual Report  (PDF)
• 2015 Consolidated financial statements – Credit Suisse  (PDF)
• 2015 Parent company financial statements – Credit Suisse  (PDF)
• 2014 Company Profile  (PDF)
• 2014 Annual Report  (PDF)
• 2014 Annual Report – Compensation  (PDF)
• 2014 Consolidated financial statements – Credit Suisse  (PDF)
• 2014 Parent company financial statements – Credit Suisse  (PDF)
• 2013 Company Profile  (PDF)
• 2013 Annual Report  (PDF)
• 2013 Annual Report – Compensation  (PDF)
• 2013 Consolidated financial statements – Credit Suisse  (PDF)
• 2013 Parent company financial statements – Credit Suisse  (PDF)
• Statement on Sustainability  (PDF)
• 2012 Company Profile (PDF)
• 2012 Annual Report (PDF)
• 2012 Consolidated financial statements – Credit Suisse (PDF)
• 2012 Parent company financial statements – Credit Suisse (PDF)  
• 4 Environmental Performance Data for In-House Operations (PDF)
• Statement on Sustainability (PDF)
• Credit Suisse GRI Statement (PDF)
• Credit Suisse SGS Assurance Statement (PDF)
• 2011 Company Profile (PDF)
• 2011 Facts & Figures (PDF)
• 2011 Annual Report (PDF)
• 2011 Annual Report – Compensation (PDF)
• 2011 Consolidated financial statements – Credit Suisse (PDF)
• 2011 Parent company financial statements – Credit Suisse (PDF)
• Corporate Responsibility Chronicle (PDF)
• Facts & Figures (PDF)
• 2010 Company Profile (PDF)
• 2010 Facts & Figures (PDF)
• 2010 Annual Report (PDF)
• 2010 Consolidated financial statements – Credit Suisse (PDF)
• 2010 Parent company financial statements – Credit Suisse (PDF)
• Corporate Responsibility Chronicle (ebook)
• Statement on Suitability (PDF)
• 2009 Company Profile (PDF)
• 2009 Annual Report (PDF)

Prior to the transaction Credit Suisse Group AG owned 100% of Credit Suisse AG (Bank), the principal operating subsidiary. The Bank's annual report is combined with the annual report of the Group and includes the consolidated and parent company financial statements of the Bank

• 2009 Consolidated financial statements – Credit Suisse (PDF)
• 2009 Parent company financial statements – Credit Suisse (PDF) 
• Corporate Citizenship Report (PDF)
• Corporate Citizenship chapter in the Business Review (PDF)
• GRI performance indicators (PDF)
• Sustainability Policy (PDF)
• Sustainability Glossary (PDF)
• 2008 Company Profile (PDF)
• 2008 Annual Report (PDF)
• 2008 Consolidated financial statements – Credit Suisse (PDF)
• 2008 Parent company financial statements – Credit Suisse (PDF)
• Sustainability Glossary (PDF) 
• 2007 Company Profile (PDF)
• 2007 Annual Report  (PDF)
• 2007 Consolidated financial statements – Credit Suisse (PDF)
• 2007 Parent company financial statements – Credit Suisse (PDF) 
• Suistainability Policy (PDF)
• Suistanability Glossary (PDF)

Further information

Share article

On the Road to Failure

Deck collection.

Largest corporate collapses and scandals

Stay in the loop

Presentations.

• Work & Careers
• Life & Arts

SocGen’s Slawomir Krupa struggles to turn tide as investors snub lacklustre reset

To read this article for free, register now.

Once registered, you can: • Read free articles • Get our Editor's Digest and other newsletters • Follow topics and set up personalised events • Access Alphaville: our popular markets and finance blog

Explore more offers.

Then $75 per month. Complete digital access to quality FT journalism. Cancel anytime during your trial.

FT Digital Edition

Today's FT newspaper for easy reading on any device. This does not include ft.com or FT App access.

• Global news & analysis
• Expert opinion

Standard Digital

Essential digital access to quality FT journalism on any device. Pay a year upfront and save 20%.

• FT App on Android & iOS
• FT Edit app
• FirstFT: the day's biggest stories
• 20+ curated newsletters
• Follow topics & set alerts with myFT
• FT Videos & Podcasts

Terms & Conditions apply

Explore our full range of subscriptions.

Why the ft.

See why over a million readers pay to read the Financial Times.

Proteus Capital seeks to deliver capital appreciation and minimize the risk of capital loss through long and short investments focused in the Technology, Media and Telecom (TMT) industries as well as industries being transformed by TMT.

INVESTMENTS

Technology intelligence is best collected from relationships with private companies, venture investors and established technology leaders

Understand creative destruction by elucidating vulnerability in technology, business models and competitive position

Manage change from disruptive technologies to new business models

Never substitute data for rational thought and invest as though we owned the business outright

We deploy a two pronged approach to long investments that leverage our experience and industry knowledge.  We spend time with our venture partners and their portfolio companies to understand what the emerging companies are before they come public.  From this research we are able to find companies that become the next generation leaders addressing large market opportunities.  We hold these investments throughout their growth phase, which provides significant capital appreciation.   We also focus on mature companies that may have slower growth rates, but will benefit from industry consolidation. These companies can generate significant cash flow that managements use to return capital to shareholders, or redeploy to further improve cash flow thus creating long-term value for investors.

We look at our short investments to be accretive to performance and in the process reduce downside volatility and the risk of permanent capital loss. Short investments develop out of research done on the long side. We focus on newer companies that will not be able to scale into leadership position by virtue of their business models or lack of competitive sustainability. We also focus on mature companies in secularly declining market segments that cannot, or are unwilling to transition themselves to changing market dynamics.

LONG TERM INVESTMENTS

SHORT TERM INVESTMENTS

Proteus was a sea god and the son of Poseidon in Greek Mythology. Homer referred to him as the Old Man of the Sea.  Proteus had oracle powers and knew all things past, present and future. If he was captured, he would give the answer to a wished for question about the future. To avoid capture, he would transform in to other characters. Proteus has assumed such forms as a lion, tree, flaming fire and flowing water.

As Proteus was capable of transforming himself to avoid being captured, Proteus Capital seeks to prudently adapt to changing fundamental conditions it faces going forward.

Formed in July 2003. Proteus Capital Management LLC is a Silicon Valley based investment advisor focused on Global Technology, Media and Telecommunications investment opportunities.

The Proteus team brings bring decades of investment experience over multiple investment cycles to the table.

Managing Partners Chris Nawn and Scott Nirenberski joined forces in 2015 to run Proteus Capital, LP but have been colleagues for over 15 years and have worked together in the past. Together, they bring decades of investment experience over multiple investment cycles to the table. Chris and Scott have each been successful at  starting and managing their own investment firms. Both Chris and Scott have worked for some of the premier investment firms in the country and the team has a long-term, proven track record in both up and down equity markets.

Christopher Nawn

General Partner & Portfolio Manager

G. Scott Nirenberski

Partner and Portfolio Manager

Christopher Nawn is the Founder, General Partner and Portfolio Manager for Proteus Capital LP. Chris has over 30 years of technology-focused public investment experience, including over ten years managing TMT hedge funds. Proteus Capital was founded in July of 2003 and has been providing strong double digit returns since inception with no leverage. From 2007 to 2010, Proteus Capital was associated with Integral Capital Partners. At the end of 2010, ICP closed, and Proteus Capital was spun out as an independent firm. During this time, the fund was ranked as a Top Ten Technology Hedge Fund by Barclays Hedge.

From 1999 to 2003, Chris created and managed a highly successful TMT hedge fund for Technology Crossover Ventures. This fund provided positive returns during the NASDAQ’s 64% bear market decline. Chris was a Portfolio Manager for several successful funds at Warburg, Pincus. One of these funds was the Warburg, Pincus Post Venture Capital Fund which rose 147% from 1996 to 1999 making it the highest performing growth fund during that time. Chris began his career covering the Technology Media and Telecom space in 1983. Chris Nawn has an M.B.A in Finance from the University of Texas at Arlington and a B.A. in Political Economics from The Colorado College.

Founding General Partner Muskoka Capital Management October, 2009 to October 2014. Mr. Nirenberski was a Principal with Seasons Capital Management, LLC from August 2006 until November 2008, where he served on a portfolio management team responsible for the firm’s investments in the technology, consumer (cyclical and non-cyclical), utilities and alternative energy

sectors. From February 2000 through June 2006, Mr. Nirenberski was a General Partner and Portfolio Manager at Mosaic Asset Management, LP, a technology-focused investment advisory firm co-founded and managed by Mr. Nirenberski. From 1999 until the founding of Mosaic, Mr. Nirenberski ran hardware and semiconductor investment research for Pequot Capital Management, Inc., a hedge fund complex focused on growth company investment management.

From 1996 to 1999, he was the Senior Semiconductor Research Analyst with Deutsche Bank Securities, and later at Credit Suisse First Boston, where he was named to Institutional Investor’s All American Research Team as a runner-up. Mr. Nirenberski began his professional investment career with Montgomery Securities LLC in 1995 as an Associate researching the semiconductor capital equipment industry. Before joining Montgomery, Mr. Nirenberski held various positions in finance and treasury at Intel Corporation from 1992 to 1995. Mr. Nirenberski was an Underwriter for Chubb Insurance from 1987 to 1990. Mr. Nirenberski received his B.S. from the University of Toronto in 1987, and an M.S. from Carnegie Mellon University in 1992. He was awarded the Chartered Financial Analyst (CFA) designation in 1997.

530 Lytton Ave, 2nd. Floor

Palo Alto, CA 94301

[email protected]

[email protected]

Chris: 650-759-0001

Scott: 415-317-6717

αθήκον μας είναι να εκτελέσει στο υψηλότερο επίπεδο για την παροχή υπηρεσιών στους επενδυτές μας

Submitting Form...

The server encountered an error.

Form received.

© 2015 Proteus Capital

header.search.error

Search Title

Ubs to acquire credit suisse.

Transaction creates significant sustainable value for UBS shareholders

Ad hoc announcement pursuant to article 53 LR.

• Creates leading global wealth manager with USD 5 trillion of invested assets across the Group
• Extends UBS lead in Swiss home market
• UBS strategy unchanged, including focus on growth in Americas and APAC
• Attractive financial terms which include downside protection
• Annual run-rate of cost reduction of more than USD 8 billion expected by 2027
• UBS remains strongly capitalized well above our target of 13% and committed to progressive cash dividend policy
• A focused Investment Bank, remaining committed to UBS’s model; strategic Global Banking businesses to be retained, majority of Credit Suisse markets positions moved to non-core

UBS plans to acquire Credit Suisse. The combination is expected to create a business with more than USD 5 trillion in total invested assets and sustainable value opportunities. It will further strengthen UBS’s position as the leading Swiss-based global wealth manager with more than USD 3.4 trillion in invested assets on a combined basis, operating in the most attractive growth markets.

The transaction reinforces UBS’s position as the leading universal bank in Switzerland. The combined businesses will be a leading asset manager in Europe, with invested assets of more than USD 1.5 trillion.

UBS Chairman Colm Kelleher said: “This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue. We have structured a transaction which will preserve the value left in the business while limiting our downside exposure. Acquiring Credit Suisse’s capabilities in wealth, asset management and Swiss universal banking will augment UBS’s strategy of growing its capital-light businesses. The transaction will bring benefits to clients and create long-term sustainable value for our investors.”

UBS Chief Executive Officer Ralph Hamers said: “Bringing UBS and Credit Suisse together will build on UBS’s strengths and further enhance our ability to serve our clients globally and deepen our best-in-class capabilities. The combination supports our growth ambitions in the Americas and Asia while adding scale to our business in Europe, and we look forward to welcoming our new clients and colleagues across the world in the coming weeks.”

The discussions were initiated jointly by the Swiss Federal Department of Finance, FINMA and the Swiss National Bank and the acquisition has their full support.

Under the terms of the all-share transaction, Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to CHF 0.76/share for a total consideration of CHF 3 billion. UBS benefits from CHF 25 billion of downside protection from the transaction to support marks, purchase price adjustments and restructuring costs, and additional 50% downside protection on non-core assets. Both banks have unrestricted access to the Swiss National Bank existing facilities, through which they can obtain liquidity from the SNB in accordance with the guidelines on monetary policy instruments.

The combination of the two businesses is expected to generate annual run-rate of cost reductions of more than USD 8 billion by 2027.

UBS Investment Bank will reinforce its global competitive position with institutional, corporate and wealth management clients through the acceleration of strategic goals in Global Banking while managing down the rest of Credit Suisse’s Investment Bank. The combined investment banking businesses accounts for approximately 25% of Group risk weighted assets.

UBS anticipates that the transaction is EPS accretive by 2027 and the bank remains capitalized well above its target of 13%.

Colm Kelleher will be Chairman and Ralph Hamers will be Group CEO of the combined entity.

The transaction is not subject to shareholder approval. UBS has obtained pre-agreement from FINMA, Swiss National Bank, Swiss Federal Department of Finance and other core regulators on the timely approval of the transaction.

Conference Call

Management will be hosting an analyst call at 10pm CET. Participants can access the webcast via the following link https://stream.swisscom.ch/ubs/20230319/

UBS Group AG and UBS AG

Investor Relations: Switzerland: +41-44-234 41 00

Media Relations: Switzerland: +41-44-234 85 00 UK: +44-207-567 47 14 Americas: +1-212-882 58 58 APAC: +852-297-1 82 00  

• www.ubs.com/annualreporting
• www.ubs.com/media
• Media release Download PDF

This website uses cookies to make sure you get the best experience on our website. You can find more information under the Privacy Statement  and our  cookie notice . You are free to change your cookies' settings in the privacy settings.

• You are here: Global

Select your domicile

• North America
• Asia Pacific
• Middle East & Africa
• Latin America
• Netherlands
• Switzerland
• United Kingdom
• United States
• Mainland China
• Hong Kong SAR
• New Zealand
• Philippines
• Saudi Arabia
• South Africa
• United Arab Emirates
• More branches and offices in Middle East Africa

Third Point Q2 2024 Investor Letter

• Third Point’s Offshore Fund returned 1.8% in Q2 and 9.8% in H1 2024, driven by diversified investments across technology, utilities, industrials, consumer, and healthcare sectors.
• Key investments include Apple, Corpay, and Intercontinental Exchange, with a focus on AI-driven growth, undervalued assets, and structural growth opportunities.
• Anticipate continued market volatility due to macro events, but expect a benign macroeconomic environment with decreasing inflation, declining interest rates, and gradual economic growth.
• Structured credit and corporate credit strategies are poised to capitalize on market dislocations, with a focus on refinancing opportunities and distressed asset acquisitions.

Funtap/iStock via Getty Images

Dear Investor,

During the Second Quarter, Third Point returned 1.8% in the flagship Offshore Fund.

The top five winners for the quarter were TSMC ( TSM ), Alphabet Inc. ( GOOG , GOOGL ), Amazon.com Inc. ( AMZN ), Vistra Corp. ( VST ), and Apple Inc. ( AAPL ) The top five losers for the quarter, excluding hedges, were Bath & Body Works Inc. ( BBWI ), Advance Auto Parts Inc. ( AAP ), Ferguson PLC ( FERG ), Airbus SE ( OTCPK:EADSF ), and Corpay Inc. ( CPAY )

During the first half of 2024, the Offshore Fund generated profits across all strategies, posting a 9.8% net return. For the previous 12 months, the fund returned 17.0% net. While returns over this period were largely driven by technology companies, much of the portfolio is invested in a range of sectors including utilities, industrials, consumer, and healthcare that provide diversification and balance to the portfolio 1 . Single name short equities were an important source of alpha during the first half of the year, and corporate and structured credit have contributed steady gains with a fraction of the volatility and risk of equities.

Our investments in the digital world including hyperscalers, consumer AI distribution platforms, and semiconductors have a key place in the portfolio, as we have discussed in previous letters. However, we are finding many investments in the "physical world" to be equally attractive. In a market consumed with technological disruption, we are focused on finding companies that are difficult to disrupt due to competitive moats, consolidated industry structures, unique products, or capital intensity that deter competitive investment. Examples include aggregates, nuclear power, life science tools, specialty alloy manufacturers, and commercial aerospace manufacturers. It is understandable that in a market whose narrative is dominated by the "Magnificent 7", these businesses receive less attention, but that is giving us even more reason to add these types of names to the portfolio when we can find them.

All investors know that early August brought tremendous volatility in equity markets. While indices have largely recovered, we expect that volatility will persist into year-end with a number of macro events - from Federal Reserve interest rate decisions; to the US elections; to the possibility of escalating conflict in the Middle East, to name just a few - contributing to a choppy environment. We modified certain exposures with this scenario in mind and worked quickly to mitigate losses during the downdraft. We are eager buyers of dislocated securities, particularly in credit, should we see further turmoil.

Despite these risks, we seem to be entering a relatively benign macroeconomic environment generally, with decreasing inflation, declining interest rates, and economic growth slowing gradually. While the bottom quintile of consumers is doing poorly, shown by subprime, credit card and other data, higher income consumers are spending and confidence remains solid. Thematically, companies continue to invest in AI infrastructure and look for applications to their businesses, and other areas are starting to show increasing demand. While weakening pricing power is evident in sectors like consumer staples, we see strength in various materials, industrials and other sectors. We believe the portfolio is well-positioned to take advantage of these trends in companies trading at what we see as fair to cheap valuations.

We are closely watching the upcoming US election for potential risks from more populist economic policies such as higher taxes and increased regulation if the Democratic party wins the Presidency, Senate, and House of Representatives. At the moment, we believe that there will be a divided government regardless of who wins the Presidential election, making some of the extreme and ill-advised measures such as taxes on unrealized capital gains, and a 44.6% top tax rate on long-term capital gains, more likely to be just campaign sound bites, rather than laws.

The lower rate environment should also produce a wave of activity in credit transactions - both public and private - as well as a burst of M&A and equity capital markets transactions, in our view. Such a period would be welcome for our event-driven and credit strategies.

Equities Updates

Apple inc. ( aapl ).

In April, we took a position in Apple, the world's leading consumer technology franchise, with an ecosystem of 2.2 billion devices spanning a broad array of form factors including smartphones, tablets, laptops, watches, earphones, and smart home devices. Apple excels in most of these device categories, with revenue share of 50-60% in several key markets.

Despite Apple's dominance as a business, its stock had become increasingly "under-owned" by institutional investors and its relative multiple had compressed toward a multi-year low. We believe that this was due to several years of stagnant earnings growth, exacerbated by more recent fears that Apple may turn out to be an AI loser. Our research led us to a different conclusion: we believe AI-related demand could drive a step change improvement in Apple's revenue and earnings over the next few years.

We believe Apple's recently announced "Apple Intelligence" suite of AI-enabled smartphone features - the most compelling of which is a next-generation virtual assistant - will start driving meaningful new demand within Apple's installed base, resulting in accelerating revenue growth on two fronts. First, iPhone revenue is going to see a marked improvement because Apple Intelligence features will not be backwards-compatible with existing iPhone models, creating the conditions for a forced upgrade cycle. Second, Apple's App Store is likely to become the primary distribution platform for most new consumer-focused AI apps such as OpenAI's ChatGPT (with which Apple recently announced a partnership). We expect Apple's claim on the future economics of these apps to be substantial as it exploits its distribution advantage.

We believe Apple's distribution advantage stems first and foremost from its unparalleled app ecosystem - which would be virtually impossible for any competing new technology platform to replicate given the powerful two-sided network effects linking app developers and app users. In addition, Apple has AI-specific product advantages conferred by its many years of work on proprietary silicon and data privacy. These advantages will be critical to the commercialization of an AI-enabled virtual assistant, which we believe may emerge as the first "killer app" for consumer-focused AI. And while we know little about the eventual capabilities and reach of this new offering, we believe the emergence of an AI layer on iOS will increasingly augment consumers' own agencies with those of the iPhone's AI features.

If Apple can execute on this opportunity, the monetization form factors will follow and have the potential to increase Apple's earnings meaningfully. This would not only be a sharp departure from the past several years of stagnant earnings growth, but also a direct repudiation of the consensus bear case. Despite the stock's recent strong appreciation, we see room for significant upside ahead as the magnitude of this new AI opportunity surprises.

Corpay ( CPAY )

This quarter we added to Corpay (formerly FLEETCOR), a position we initiated in the Fourth Quarter of 2023. Corpay is a collection of network assets in the payments space, most notably a fuel card business, where the company processes fuel purchases by commercial vehicle operators, and a B2B payments business where Corpay facilitates vendor payments for midmarket clients. These two segments together make up >70% of Corpay revenues. The company is run by CEO of 24 years, Ron Clarke, who in our view has delivered an impressive track record for shareholders of 20% compounded EPS growth since going public in 2010, including 15% over the last 10 years, through a combination of revenue growth, margin expansion, and accretive capital allocation in M&A and share repurchases.

Over the last five years, CPAY has seen its P/E multiple significantly de-rate from the mid- 20s to ~13x as market sentiment toward the company's core fuel card business soured. Firstly, growth in the segment has slowed as the market has matured. Secondly, the rise in popularity of electric vehicles (EVs) as a theme has made investors question the terminal value of a business whose main function is to process gasoline and diesel payments. Corpay has proactively prepared for an EV transition by making acquisitions in EV charging payments and adding mixed/EV fleets to its customer base, wherein CPAY earns higher unit economics on mixed fleets than it does on pure internal combustion engine fleets. Finally, the last year has demonstrated that a transition to an electric fleet is more easily said than done. With EV sales declining for industry bellwether Tesla ( TSLA ), European EV sales declining overall, and flattening in the US, it is becoming clear that the journey of automotive electrification will be a long one.

Regarding revenue growth, we believe CPAY is at a unique juncture. While the fuel card segment slows to a more mature rate of growth, the company's B2B Payments business continues to grow at 15-20% per annum, organically . While this business came from humble beginnings in 2015 with the acquisition of Comdata, at the time $162 million and more than 10% of revenue, through what we believe was excellent execution and savvy M&A, this business segment has grown to $1.2 billion and 30% of revenue today. In the next couple years, we believe B2B Payments will overtake the fuel card segment to become Corpay's biggest business. We see this as a watershed moment for the stock, which will turn investor focus from the prior driver of Corpay's revenue growth to the next one and will reassure investors that Corpay has many years of 10%+ EPS growth ahead.

From a valuation perspective, it is incredibly rare to find a high EPS growth, high margin, high ROIC company trading at such a low valuation. We screened for companies with >50% EBITDA margins, 10-year EPS CAGR of >15% and 3-year median CFROI of >15%. There are just five companies in the S&P 500 with these characteristics: Nvidia ( NVDA ), Visa ( V ), Mastercard ( MA ), MSCI and Corpay. Corpay's 13x P/E valuation in the company of these other four compounding juggernauts is remarkable.

Finally, CEO Ron Clarke continues to show why, in our view, he belongs on the Mount Rushmore of capital allocators. Over the last six months, Corpay has deployed more than $2 billion in M&A and share repurchases, which together we think will be 7% accretive to 2025 earnings. We love giving our capital to seasoned operators with a track record of success and skin in the game, and we look forward to seeing him continue to create value for shareholders over the coming years.

Intercontinental Exchange ( ICE )

During Q2, we added to our position in Intercontinental Exchange ( ICE ). We originally invested in ICE in April 2023 when the FTC's challenge to the company's proposed acquisition of Black Knight impacted the share price. While the deal overhang has lifted, we believe a re-rating opportunity from a structural and cyclical acceleration of growth is still ahead. Importantly, we expect that AI will drive new growth opportunities across most of ICE's businesses, extending the runway for value creation.

ICE is a collection of dominant information services and exchange assets that automate diverse and large asset classes (Energy, Mortgages, Fixed Income, Rates and Equities) while producing vast amounts of proprietary data. CEO Jeff Sprecher has led ICE for over 20 years. Under his visionary leadership, the company has compounded organic revenue and EPS at ~5% and ~15%, respectively, and adopted new modalities through organic investment and strategic acquisitions, most notably creating the flagship clusters of Energy and Mortgage, franchises we believe are of very high business quality. On the horizon, we expect an acceleration of growth to a consistent low double digit organic algorithm in these businesses, and a re-rating of the stock as price follows value creation.

ICE generates 30% of revenue from its Energy franchise, which holds dominant positions across the oil, natural gas, and environmental futures markets. In recent years, ICE's Energy futures franchise has accelerated markedly, and we believe the 25% growth experienced in 2023 is set to sustain into 2024. This rapid growth is driven by rising demand for natural gas and the globalization of natural gas markets following the significant build out of liquified natural gas ('LNG'). We expect global natural gas demand to accelerate over the next several years due to the well-publicized growth in electricity demand in developed markets, as well as coal-to-gas switching in developing markets to reduce CO 2 emissions. The pace of globalization of natural gas markets is also accelerating we believe due to a key innovation by US LNG exporters, who have modified LNG contracts from being long-term bilateral agreements with "destination clauses" to contracts where cargoes are purchased "free on board" and can be directed by the buyer to any location on the globe subject to market prices in Asia and Europe. Both megatrends are benefiting ICE's natural gas futures complex, specifically its seaborne TTF / JKM contracts that are central to LNG trading.

ICE generates another 20% of revenue from its Mortgage franchise, which is the only scale software vendor in Mortgages. Following the acquisitions of Ellie Mae and Black Knight, ICE now has the building blocks needed to automate the highly analogue and parochial mortgage origination and servicing ecosystem in the US: over 50% market share in mortgage origination software, over 50% market share in mortgage servicing software, the largest third-party app marketplace, the system of record for mortgage servicing rights, and the definitive database for mortgage loan performance. By creating a 360-degree view of the customer, we believe ICE will ultimately create a life-of-loan platform that reduces the high costs and inefficient wait times of originating and servicing mortgage loans, while at the same time harnessing the vast amounts of mortgage data on its platforms for primary and secondary market participants to trade on.

In less than a year since the acquisition of Black Knight, ICE has already had strong commercial success with cross-sell wins at J.P. Morgan, M&T Bank ( MTB ), Fifth Third Bank ( FITB ) and Lennar ( LEN ) to name a few, as well as new product rollouts like its GenAI conversational assistant for its servicing platform. As ICE consolidates the market on one end-to-end platform, it will also retain a significant portion of these productivity gains, in our view, fueling strong double-digit growth once we emerge from the mortgage market bottom in 2024.

Credit Updates

Corporate credit.

Third Point corporate credit returned 4.4% gross (3.6% net) through the first half of 2024, outperforming the J.P. Morgan High Yield Index, which returned 2.6%. We suffered no material losses and our small position in GSE preferreds was up over 50%. Our relatively muted overall performance was due to a slower-than expected realization of the events that we expect will drive our positions higher, and continued weakness in the cable sector. We have both long and short positions in cable that we expect will perform well later this year as the winners and losers from changes in the competitive landscape become clear.

Looking ahead, the table is set for increasing volatility and a broader opportunity set is already emerging. Overall credit spreads are tight, however this belies the underlying dispersion in the market. BB spreads are near their tightest levels ever in comparison to BBBs, while the ratio of CCC to B spreads is at its highest in history. We believe that this dispersion partly reflects a recognition that the long and variable lags associated with the impact of changes in monetary policy are coming home to roost.

These impacts are likely to be further magnified by the excesses of 2020 and 2021 - peak deal volume at peak valuation and trough rates. The timing of the impact of higher rates on highly leveraged capitalizations is a function of the composition of the capital stack. Fixed rate debt and hedges can delay but not avoid this impact. The private credit market, which is overwhelmingly floating rate, provides a forward look and, from our viewpoint, it is messy. Middle market unitranche yields have been moving higher, pushing the percentage of private credit borrowers with fixed charge coverage ratios below 1x to 40%, according to an analysis by PIMCO and Lincoln International.

While credits are generally more leveraged in private than public markets, we believe public markets will likewise face increasing stress as the impact of higher rates hits fixed rate issuers that have to refinance at higher rates. We expect these pressures to provide a wealth of opportunity in the secondary markets for public credit.

Additionally, we continue to see the lines blurred between "public" and "private" credit, a trend we expect to accelerate as these stresses evolve. The syndicated leveraged loan market started as an essentially private market but evolved into a liquid secondary market as settlement procedures were standardized in the early 1990's. We have already seen loans that began life as "private" trade, and we will be eager to take advantage of this new deal flow as more opportunities arise.

Structured Credit

We believe structured credit remains one of the last untapped markets for many institutional clients. We are seeing more insurance companies and private credit firms enter asset classes that we have been invested in for as long as seven years and welcome them to the table. Since the liquidity crisis some banks faced in March 2023, many credit funds have emerged to buy consumer loans, a trade we have executed with strategic venture partnerships since 2017 in our main funds and the dedicated structured credit funds. Today, private credit funds are driving up prices for sizeable loan trades from banks happy to sell and then provide expensive senior financing.

We believe this market dynamic has created an exciting opportunity for us to refinance some of our mortgage loans with AAA spreads tightening from 165bps to 120bps in 2024. In our view, we have the benefit of existing strong performing collateral and the ability to combine with the smaller loan pools for a better arbitrage. We believe that active trading and sourcing new trades, which is a hallmark of our strategy, is also a key differentiator in this market, as nimble hedge funds can capitalize on market inefficiencies and/or dislocations, whether via early looks on mortgage securitizations or the ability to quickly assess the best risk/reward in rental car companies with public corporate debt and equity, as well as ABS.

With the macroeconomic background pointing to potential rate cuts, we believe the Treasury market rally provides a tactical window to monetize risk through attractive senior financing while selloffs in specific credits will enable us to source cheaper bonds in the secondary market. We believe certain segments of our whole business and mortgage assets can experience meaningful capital appreciation if both the macroeconomic and asset-specific events play out over the next 12 months. In our reperforming mortgage deals, we have executed five refinancings and have seven more in the pipeline. As rates rally and concerns of a recession re-emerge, mounting credit issues in public corporate credit and commercial real estate should present interesting opportunities for us to reinvest amidst the volatility. In addition, as the leveraged loan market in our view is heavily relying on amending maturities and extending into 2025 and 2026, we will see CLO managers tested, as "covenant lite" loans need to be restructured and 60% of borrowers in US BSL CLOs have PE-backed sponsors that are waiting for painful and protracted negotiations.

We anticipate increased opportunities in the corporate and real estate markets as credit deteriorates. In our US residential housing exposure, we remain excited about the current return profile and capital appreciation potential as rates trend lower. We are long duration in our mortgage exposure and the rate rally provides a promising tailwind to our projected return profile.

Business Updates

Sunil Mehta joined the Private Credit team as a Managing Director in Q2. Prior to joining Third Point, he served as Head of Sponsor Coverage for Apogem Capital, a subsidiary of New York Life formed by the merger of three boutique investment firms, including Madison Capital Funding. Mr. Mehta was also an investment committee member for Apogem Capital's debt and equity platform strategies, including senior secured debt, unsecured junior debt, primary fund buyout and co-investment, social advancement fund buyout and co- investment. He began his career at JPMorgan Chase ( JPM ) lending directly to middle market businesses. Mr. Mehta earned an MBA from the University of Chicago Booth School of Business and a B.S.B.A. in International Business from Drake University.

Mikhail Faybusovich also joined the Private Credit team as a Managing Director in Q2. Prior to joining Third Point, he served as a Managing Director in the Investment Banking Capital Markets division of Credit Suisse with primary focus on execution of leveraged finance transactions for private equity and corporate clients. Since joining Credit Suisse in 2004, he executed over 250 lead-arranged transactions across multiple industries, raising over $200 billion in debt financing, managed a global team responsible for over $23 billion loan portfolio and served on several committees within Leveraged Finance franchise. He started his career at The Royal Bank of Scotland in the Corporate & Institutional Banking Group. He holds a B.A. from the Lubin School of Business at Pace University and is a CFA charterholder since 2008.

Daniel S. Loeb CEO

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

This article was written by

Recommended For You

About tpntf stock.

More on TPNTF

Related stocks.

Trending Analysis

Trending news.