Activist hedge fund Elliott back in spotlight continuing long-term track record of bold bets

ezgif.com-resizeActivist hedge fund Elliott Management‘s letter to BHP Billiton’s board on Monday is only one of a series of high profile interventions in recent years.

Yet the bold approach by the fund which claims around a 4.1 percent interest in the £78 billion ($96 billion) mining giant is only one of a series of high profile interventions made by Elliott Management (or its subsidiaries) in recent years.

These include last month’s threat to Dutch chemicals firm Akzo Nobel’s directors to call a vote on ousting the board if it refused to engage with bidder and U.S. rival PPG and pushing Katherine Garrett-Cox, then-chief executive officer (CEO) of Scottish investment house Alliance Trust, to the door last year in response to the firm’s underwhelming performance.

Fund structure

Paul Singer, a 72-year old billionaire, set up Elliott back in 1977 with just north of a million dollars of seed capital raised from friends and family. Since then the fund’s assets under management (AUM) have soared to around $31 billion, securing it a place among today’s largest global hedge funds.

Meanwhile, Singer’s own net worth was most recently estimated by Forbes at $2.6 billion.

Joining the founder at the top are three other equity partners, including son Gordon who runs the London office, portfolio manager Steven Kasoff and Singer’s co-chief investment officer, Jon Pollock.

Political stance

Republican Singer’s stance towards the party’s current leadership has meandered in recent months with the Elliott Management founder’s initial vocal rejection of President Donald Trump replaced with an apparent wholesale change in attitude, accompanied by a visit to the White House which was gleefully seized upon and trumpeted by the president.

“As you know, Paul was very much involved with the anti-Trump or as they say ‘Never Trump’ and Paul just left and he’s given us his total support and it’s all about unification … So, I want to thank Paul Singer for being here and coming up to the office. He was a very strong opponent and now he’s a very strong ally and I appreciate that,” Trump said at a news conference in February.

Track record

The highly respected hedge fund tycoon ably demonstrated that persistence can beat resistance when his fifteen-year tussle with the Argentinian government over unpaid bond obligations owed to his fund resulted in a $2.4 billion windfall for Elliott.

Indeed, the fund is said to have only had two years in which it has ended down since it was founded 40 years ago, according to Forbes.

Style

“We try to make money all the time,” Singer told the Wall Street Journal in October 2016, as he explained how the firm’s strategy had evolved since the 1970s from a focus on convertible hedging and other relative value arbitrage to distressed investing to merger arbitrage and now to active equity investing.

“Active equity investing is a natural evolution for Elliott in trying to make something happen and control our destiny not just annoy people,” he added.

Asked by a reporter in 2016 how company bosses reacted to an unsolicited call from him, Singer asserted that such a situation wasn’t realistic.

“I’m not the one making the call. I’m the lurking presence,” he smiled.

Source: HITC

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