Peers Join Third Point In Sotheby's, FedEx Bets

Nov 18 2013 | 2:48pm ET

A number of top hedge funds appear to be following a new and potentially profitable strategy: Follow Dan Loeb's lead.

Last week's regulatory filings show that a number of hedge funds have bought up stakes in auction house Sotheby's, which Third Point's Loeb has launched an activist campaign against, and Federal Express, which Loeb announced a position in earlier in the week.

Among the Sotheby's buyers were Ellington Management Group and Eton Park Capital Management, Reuters reports, joining Third Point and Marcato Capital Management. Loeb has loudly criticized Sotheby's in recent months, blasting its "chronically weak operating margins" and "dysfunctional division and fractured culture," and calling for the ouster of CEO William Ruprecht.

On FedEx, Loeb, who bought 2 million shares in the third quarter, has been joined by industry heavies Soros Fund Management, which controls almost as many shares, and Paulson & Co., which owns a more modest horde of 646,800 shares.

At a New York conference on Tuesday, Loeb said he had taken the FedEx stake, but would not seek CEO Frederick Smith's head as he has Ruprecht's. Loeb called Smith "great."

"We had a very constructive discussion about the company," he said. "We had some ideas, we shared them. I think he disabused us of some of our notions. Life goes on."


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