Key Takeaways
- • Elliott Management, the activist hedge fund led by Paul Singer, built a 9.2% stake in Athenahealth in May 2017, making it one of the company's largest shareholders, according to The New Yorker's account of the episode.
- • Elliott manages roughly $35 billion and has averaged annual returns of almost 14%, with a single dollar invested at its 1977 inception now worth $179, per the article.
- • Singer's activist model centers on acquiring stakes in underperforming companies and pressuring management, often through public letters criticizing the CEO, which frequently precede resignations or asset sales.
- • The article details how Elliott's distressed-debt strategy, pursued since the 1980s, produced long legal campaigns against Argentina, Caesars Entertainment, and others, and how Singer is one of the G.O.P.'s top donors.
- • Athenahealth CEO Jonathan Bush described an entire industry of crisis-communication firms, banks, and law firms that charge millions in fees to defend companies against activists like Elliott.
Summary
The New Yorker profile of Paul Singer uses the 2017 confrontation between Elliott Management and Athenahealth as its entry point. On May 18, 2017, while Athenahealth co-founder and CEO Jonathan Bush was sailing back from Bermuda, he received a call from Jesse Cohn, an Elliott employee and Singer protégé, who informed him that Elliott held a 9.2% stake in the health-care technology company and was now one of its largest shareholders. According to the article, Cohn cited the stock's recent decline, which he said was hurting morale and recruiting, and said other investors were unhappy.
The piece places the episode within Singer's broader record. Elliott, founded in 1977 with $1.3 million, manages about $35 billion and has lost money in only two of its 41 years, according to the article. Its average annual returns are almost 14%. The article notes that news of an Elliott investment often lifts a target's share price. Elliott's signature tactic is a public letter criticizing the target's chief executive, frequently followed by a resignation or a sale. The article also cites Singer's unsuccessful campaign against a Samsung merger, which it says contributed to the impeachment and imprisonment of South Korea's President after opponents allegedly bribed officials.
Activist investing remains controversial, with critics citing layoffs and reduced investment and proponents citing improved management discipline. Bush, quoted in the piece, described the advisory ecosystem that emerged around such campaigns as adding little economic value, while concluding that the episode had prompted useful self-reflection at Athenahealth.
The profile also covers Singer's distressed-debt strategy, which began in the 1980s and involves buying the debt of financially troubled companies and pursuing long legal battles in bankruptcy court. Elliott's holdings in such situations have included TWA, Euro Tunnel, Lehman Brothers, and Caesars Entertainment. The article identifies Singer as one of the largest financial donors to Republican causes and says his legal fight with Argentina over sovereign debt defined his public reputation.
The piece places the episode within Singer's broader record. Elliott, founded in 1977 with $1.3 million, manages about $35 billion and has lost money in only two of its 41 years, according to the article. Its average annual returns are almost 14%. The article notes that news of an Elliott investment often lifts a target's share price. Elliott's signature tactic is a public letter criticizing the target's chief executive, frequently followed by a resignation or a sale. The article also cites Singer's unsuccessful campaign against a Samsung merger, which it says contributed to the impeachment and imprisonment of South Korea's President after opponents allegedly bribed officials.
Activist investing remains controversial, with critics citing layoffs and reduced investment and proponents citing improved management discipline. Bush, quoted in the piece, described the advisory ecosystem that emerged around such campaigns as adding little economic value, while concluding that the episode had prompted useful self-reflection at Athenahealth.
The profile also covers Singer's distressed-debt strategy, which began in the 1980s and involves buying the debt of financially troubled companies and pursuing long legal battles in bankruptcy court. Elliott's holdings in such situations have included TWA, Euro Tunnel, Lehman Brothers, and Caesars Entertainment. The article identifies Singer as one of the largest financial donors to Republican causes and says his legal fight with Argentina over sovereign debt defined his public reputation.
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