Daniel Loeb's $14bn activist hedge fund has taken a stake in Nokia, in a move that puts pressure on the Finnish company to return cash to shareholders after the sale of its handsets business to Microsoft.
Mr Loeb - frequently an acerbic critic of the management at companies he buys into - told investors in his Third Point hedge fund that he expected Nokia to distribute a "meaningful portion" of the handset business sale proceeds "in coming quarters".
His investor letter did not reveal the size of the stake that Third Point has taken in Nokia, or suggest that Mr Loeb will push for a particular size of cash distribution.
But it contained strong opinions on the potential for generating value from Nokia's remaining businesses - setting the US fund manager up as a powerful outside voice on the future direction of the company.
"For years, the investment case for Nokia has centred on the prospects for the handset business with little emphasis on Nokia Siemens Networks, the maps business or the intellectual property licensing opportunity," Mr Loeb wrote.
Nokia - which on Tuesday unveiled a long-awaited tablet computer and a range of supersized "phablet" smartphones - is likely to have close to €8bn in net cash on its balance sheet, after it completes the €5.4bn sale of its handsets business to Microsoft.
Although the telecoms group has not yet announced what it will do with the cash while it decides on its future strategy, analysts are expecting some sort of payout to investors. Nordea said on Tuesday that it expected a distribution of €1 per share in 2014, assuming that Nokia wanted to retain about €2bn in net cash.
However, Nordea also highlighted the possibility that Nokia might distribute less, and instead use the money retained for its own acquisitions.
Pierre Ferragu, an analyst at Bernstein, suggested that the involvement of an activist investor might be best way to maximise shareholder returns. "There is a strong case for activism in Nokia, as the optimum way to return cash to shareholders could be through dismantling the company," he said.
However, any attempt to force Nokia to return cash would potentially stymie future growth prospects - which had been revived by reports that a slimmed down Nokia would have a renewed interest in buying or merging with French rival Alcatel-Lucent.
Mr Loeb also said in his quarterly letter that he would return $1.4bn of his fund to Third Point investors, in a further indication that hedge fund managers are finding opportunities for profit hard to come by. In the year to date, the fund value has grown 18 per cent, and the cash return is an attempt to "moderate its growth", he wrote.
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