Strategic Investment: Elliott Management's Secrets To Success

Elliott Investment Management L.P. is an American investment management firm and one of the largest activist funds in the world. It was founded by Paul Singer, who is also the CEO, in January 1977 and is currently headquartered in West Palm Beach, Florida. The firm has a particular focus on technology, financial services, and energy companies and is known for driving significant improvements in the companies it invests in. Elliott Management's latest portfolio value is calculated to be $16,121,624,500 USD, with discretionary assets under management (AUM) of $73,511,332,303. The firm is currently closed to new investors.

Elliott Management's investment strategy

Elliott Management Corporation is a towering figure in the intricate tapestry of global finance. Its distinct approach to investing sets it apart from its peers. With a penchant for distressed debt and an appetite for activism, Elliott has earned a reputation as a formidable force in corporate boardrooms. The firm employs a multi-strategy trading approach that encompasses a broad range of strategies, including equity-oriented, private equity and private credit, distressed securities, non-distressed debt, hedge/arbitrage, real estate-related securities, commodities trading, and portfolio volatility protection.

Elliott Management's investment philosophy centers on a disciplined and opportunistic approach to generating returns for its investors. The firm employs a range of strategies tailored to capitalize on market inefficiencies and special situations. One of the key aspects of Elliott's investment philosophy is value-oriented investing. Elliott seeks to identify undervalued assets, distressed securities, or companies with significant growth potential relative to their market price. The firm conducts thorough fundamental analysis to assess the intrinsic value of investments, aiming to purchase assets at a discount to their true worth.

Another cornerstone of Elliott's strategy is distressed debt and special situations. The firm actively seeks out distressed assets, troubled companies, or complex situations where it believes it can unlock value through strategic interventions. Elliott is known for its activist approach, often challenging management teams and agitating for change in pursuit of shareholder value. The firm may take activist positions in companies it perceives as undervalued or underperforming, advocating for changes that enhance shareholder value.

In addition to its focus on value-oriented investing and distressed debt, Elliott also actively monitors and participates in event-driven opportunities. The firm leverages its expertise and resources to analyze the potential impact of mergers, acquisitions, spin-offs, and other corporate events on securities prices, seeking to capitalize on mispricings or arbitrage opportunities. A portion of Elliott's portfolio is in what are referred to as hedge/arbitrage positions, which are designed to take advantage of small anomalies between similar or related instruments on an opportunistic basis and to assist in achieving overall portfolio risk management goals.

Finally, Elliott employs rigorous risk management techniques to mitigate downside risk and preserve capital. The firm may use hedging strategies, derivatives, or other risk mitigation tools to protect its portfolio against adverse market movements or specific risks associated with its investments. While Elliott may engage in short-term trading or event-driven opportunities, the firm often takes a long-term perspective on its investments, seeking to build sustainable value over time.

The firm's history and structure

Elliott Investment Management L.P. is an American investment management firm and one of the largest activist funds in the world. It is the management affiliate of the American hedge funds Elliott Associates L.P. and Elliott International Limited. The firm was founded by Paul Singer in 1977, who is also the CEO of the management company, based in New York City. Singer started the company with $1.3 million from friends and family, choosing the name "Elliott" as it is his middle name.

In its early years, the firm focused on convertible arbitrage. However, since the 1987 stock market crash and the early 1990s recession, the firm has transitioned into a multi-strategy hedge fund. Elliott Associates manages $8.6 billion and is Elliott Management's primary domestic fund.

Elliott Investment Management has a global presence with offices in New York City, London, Tokyo, and Hong Kong. As of April 1, 2021, the firm employs 470 people worldwide, with nearly half dedicated to identifying and managing investments, trading, and research. The firm's investment approach is characterised by its focus on the creation, rather than just the identification, of value. This approach has led to success in a range of industries, particularly technology.

Elliott's technology team includes private equity and public equity investment professionals, who work alongside experienced operating executives and other consultants. The firm's private equity team has closed more than $80 billion in technology and technology-enabled services private equity transactions across approximately 30 platform companies and 30 add-on acquisitions. Additionally, Elliott's public equity team has invested in over 85 public technology, media, or telecommunications companies.

Elliott Investment Management has a strong track record of investing in both public and private companies in the technology sector, which has contributed to its extensive knowledge and broad set of relationships in the industry. This network provides a distinct competitive advantage in completing investments and enhancing value.

Notable investments and acquisitions

Elliott Investment Management L.P. is an American investment management firm and one of the largest activist funds in the world. It was founded in 1977 by Paul Singer, who is also the CEO. As of 2015, Elliott's portfolio was worth over $8 billion, with a focus on distressed securities and debt from bankrupt or near-bankrupt companies. The firm has since expanded into other sectors, including distressed real estate and sovereign debt.

• Twitter: In February 2020, Elliott Management purchased Twitter stock worth about $2 billion and nominated three directors to the company's board, expressing a desire to replace CEO Jack Dorsey. Elliott exited its Twitter investment in June 2022 after Elon Musk's tender offer, making a gain of approximately 33% over two years.
• Shopko: In April 2005, Elliott joined other hedge funds in opposing the sale of Shopko, a Wisconsin-based retail chain, arguing that the offered price was too low and citing concerns about conflicts of interest. Elliott eventually participated in purchasing ShopKo at a higher price.
• A.C. Milan: In July 2018, Elliott Management took ownership of the Italian football club after the previous owner defaulted on a €415 million debt. Elliott stabilised the club's finances and sold it to RedBird Capital Partners in June 2022 for €1.2 billion.
• Barnes & Noble: On 7 June 2019, Elliott Management announced the acquisition of Barnes & Noble for around $683 million. James Daunt, CEO of Waterstones, became the CEO of Barnes & Noble as well.
• SoftBank Group: In February 2020, Elliott Management built a stake worth more than $2.5 billion in the Japanese conglomerate. However, by August 2022, Elliott had sold most of its shares, reportedly due to a loss of confidence in SoftBank's leadership.
• BioMarin Pharmaceuticals: In November 2023, Elliott invested over $1 billion in BioMarin, a company focused on rare genetic disorders and valued at about $16 billion.
• Southwest Airlines: In June 2024, Elliott Management announced a $1.9 billion investment in Southwest Airlines, intending to oust the company's leadership due to their failure to evolve.
• Comcast: In September 2015, Elliott purchased a 1,940,642-share stake in Comcast, a Philadelphia-based mass media company, for an average price of $58.68 per share.
• CDK Global: Elliott acquired a 4% stake in CDK Global in May 2015 and later pushed for operational changes to improve shareholder value. By September 2016, Elliott held a 5.4% stake in the company.
• Telecom Italia: In May 2018, Elliott Management gained control of two-thirds of Telecom Italia's board seats after a battle for control.
• Samsung Construction: In 2015, Elliott opposed efforts by Samsung's acting head, Jay Lee, to have another part of the firm purchase the construction unit for $8 billion. Despite Elliott's opposition, the merger went through, and Elliott subsequently sold its shares.

Leadership and key figures

Elliott Management is led by its founder, Paul Singer, who is also the company's president, co-chief executive officer, and co-chief investment officer. Singer founded Elliott Associates, the management affiliate of Elliott Management, in 1977 with $1.3 million from friends and family. He chose the name "Elliott" as it is his middle name.

Singer is known for his conservative investment style, hedging all his investments to reduce the risk of loss, and prizing manual efforts as the defining characteristic of his investment style. He has been described as a lawyer by training who found he could use the court system to great gain as an investor in bankruptcy situations.

As of 2020, Elliott Management had seven equity partners, including Singer and his son, Gordon Singer, who manages the London office. The other equity partners are Jonathan Pollock, Steve Cohen, Jesse Cohn, Dave Miller, and Zion Shohet.

In addition to the equity partners, Elliott Management's management committee includes Terry Kassel, head of strategic human resources, and Richard Zabel, equity partner, general counsel, and chief legal officer. Dan Senor is the chief public affairs officer.

Performance and growth

Elliott Investment Management L.P. is an American investment management firm and one of the largest activist funds in the world. It is the management affiliate of American hedge funds Elliott Associates L.P. and Elliott International Limited. The firm was founded by Paul Singer, who is the CEO of the management company, and is based in West Palm Beach, Florida.

Elliott Management has a strong track record of driving significant improvements in the companies it invests in. As of 2024, the firm has 570 employees in New York City, London, Tokyo, and Hong Kong, and is one of the oldest hedge funds under continuous management.

Elliott Management's portfolio includes investments across various sectors, with a particular focus on technology, financial services, and energy companies. Its top holdings include Suncor Energy Inc., Triple Flag Precious Metals Corp., Invesco QQQ Trust, Series 1, Marathon Petroleum Corporation, and The Select Sector SPDR Trust - The Energy Select Sector SPDR Fund. The firm's latest portfolio value is calculated to be over $16 billion USD, with actual Assets Under Management (AUM) being higher as cash is not disclosed.

Elliott Management has a history of successful investments, including:

• Pinterest (PINS): As of September 30, 2023, Pinterest was Elliott's fourth-largest holding, accounting for 5.88% of its $13 billion portfolio. Pinterest has seen strong revenue growth and an increase in global monthly active users, with its stock price up nearly 50% year-to-date.
• Triple Flag Precious Metals (TFPM): This is Elliott's largest position at $1.75 billion, accounting for 13.58% of its portfolio. Triple Flag Precious Metals provides streaming and royalty financing to mine operators, with royalties based on revenues from gold and silver mines. This business model offers limited exposure to operating and capital costs and has generated significant free cash flow.
• Crown Castle (CCI): Elliott has amassed a $2 billion stake in Crown Castle and is campaigning for changes in management, board leadership, and strategic initiatives to improve shareholder returns.
• Twitter: In February 2020, Elliott Management purchased about $2 billion in shares of Twitter, and nominated three directors to the board. Elliott exited Twitter in June 2022 with a gain of approximately 33% on the investment.
• Waterstones: In April 2018, Elliott bought a majority stake in Waterstones, the UK's largest book retailer, with James Daunt remaining as CEO.
• AC Milan: In July 2018, Elliott Management took ownership of Italian football club AC Milan after the previous owner defaulted on a debt. In June 2022, Elliott sold the club to RedBird Capital Partners for €1.2 billion.
• Barnes & Noble: In June and August 2019, Elliott Management acquired Barnes & Noble for around $683 million, with James Daunt becoming the CEO.

Elliott Management's successful investments have resulted in significant growth and performance improvements, making it one of the leading activist investment firms in the world.

Frequently asked questions