Key Takeaways
- • Elliott Management, which oversees more than $31bn in assets according to the BBC, has built a reputation over roughly 40 years as a no-holds-barred activist investor with an unusually large appetite for public confrontations.
- • The firm bought a 6% stake in UK hotel and coffee group Whitbread, and reports say it wants Whitbread to split its Costa coffee chain from its hotel business.
- • Elliott's track record includes the Argentine debt pursuit, pressure on BHP Billiton to sell its US shale business, a truce with AkzoNobel that led to the sale of its chemicals business, and pressure on Samsung to restructure.
- • Josh Black of Activist Insight says the firm's size lets it handle more simultaneous public situations than most activists, and that its recent work with private equity firms and a stake in Bentham Ventures is a new departure.
- • Critics liken Elliott to a vulture capitalist focused on short-term gains, and it was fined by French regulators in 2014 for insider trading.
Summary
Elliott Management, a New York hedge fund overseeing more than $31bn (£22bn) in assets, has spent roughly 40 years as one of the most combative activist investors, according to the BBC. The firm is known for pursuing Argentine debt for more than a decade, including seizing an Argentine naval ship docked in Ghana, an episode that prompted the country to default.
The firm has targeted some of the world's largest companies. In the UK it intervened at coach operator National Express and pursued supermarket Tesco for damages linked to a 2014 accounting scandal. It pushed BHP Billiton to reorganise, and last year BHP agreed to sell its US shale business, one of Elliott's recommendations. It has also pressed South Korea's Samsung to restructure. At AkzoNobel, Elliott helped the company fend off a takeover and reached a truce committing it to improvements, including the sale of its chemicals business.
Elliott has now bought a 6% stake in Whitbread. Reports say it wants Whitbread to separate its coffee chain from its hotel business. Josh Black, editor-in-chief of Activist Insight, which tracks shareholder activism, said the firm is "renowned for being very involved and active" and that its size lets it manage more public situations at once. Its strategies range from buying distressed debt to intervening in mergers, and it often targets companies it considers undervalued, pushing for leadership changes, spin-offs or buybacks.
Critics compare the firm to a vulture capitalist focused on short-term wins, and French regulators fined Elliott in 2014 for insider trading. Politicians concerned about jobs in their districts have pushed back on some recent campaigns. Paul Singer, the firm's founder, has rejected these characterisations, saying at a 2016 conference, "I believe in a balance of power," and that Elliott's activities have added to stakeholder value.
Elliott has moved beyond its early focus on technology firms, making demands on dozens of companies in recent years. It has also broadened its partnerships, working with a private equity firm in at least one instance and taking a large stake in Bentham Ventures, a firm focused on shareholder lawsuits. Black described this expansion as "all quite new."
The firm has targeted some of the world's largest companies. In the UK it intervened at coach operator National Express and pursued supermarket Tesco for damages linked to a 2014 accounting scandal. It pushed BHP Billiton to reorganise, and last year BHP agreed to sell its US shale business, one of Elliott's recommendations. It has also pressed South Korea's Samsung to restructure. At AkzoNobel, Elliott helped the company fend off a takeover and reached a truce committing it to improvements, including the sale of its chemicals business.
Elliott has now bought a 6% stake in Whitbread. Reports say it wants Whitbread to separate its coffee chain from its hotel business. Josh Black, editor-in-chief of Activist Insight, which tracks shareholder activism, said the firm is "renowned for being very involved and active" and that its size lets it manage more public situations at once. Its strategies range from buying distressed debt to intervening in mergers, and it often targets companies it considers undervalued, pushing for leadership changes, spin-offs or buybacks.
Critics compare the firm to a vulture capitalist focused on short-term wins, and French regulators fined Elliott in 2014 for insider trading. Politicians concerned about jobs in their districts have pushed back on some recent campaigns. Paul Singer, the firm's founder, has rejected these characterisations, saying at a 2016 conference, "I believe in a balance of power," and that Elliott's activities have added to stakeholder value.
Elliott has moved beyond its early focus on technology firms, making demands on dozens of companies in recent years. It has also broadened its partnerships, working with a private equity firm in at least one instance and taking a large stake in Bentham Ventures, a firm focused on shareholder lawsuits. Black described this expansion as "all quite new."
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