Third Point’s Short Strategy Moving Away From Small Caps

Amid a 10 percent Standard & Poor's rally this year, some of  Third Point's short holdings have held it back notes Kate Kelly of CNBC, as even the most beaten-down companies have staged remarkable comebacks.

The $12 billion hedge fund Third Point has been on a tear this year, with trades like a long Nikkei position and shares of  Yahoo! Inc. (NASDAQ:YHOO) contributing to overall returns of 15 percent in its offshore fund through May. One area that has been working less well: a specialized short book that relies...