Elliott Investment Management has established itself as one of the preeminent activist hedge funds globally, recognized for its assertive tactics aimed at restructuring underperforming companies. Based in West Palm Beach, Florida, the hedge fund manages approximately $69.7 billion in assets and employs around 570 individuals as of June 30. Elliott is notorious for its direct and often public strategies to elevate the business and stock performance of major corporations experiencing difficulties.
Founded in 1977 by Paul Singer with an initial investment of approximately $1.3 million primarily sourced from friends and family, Elliott began as a modest firm focused on convertible bond arbitrage and later moved into distressed investing. By the 2000s, the firm transitioned to activist investing, where it acquires significant stakes in companies to influence management decisions and drive change. Paul Singer continues to serve as the firm’s president, co-CEO, and co-CIO.
Among Elliott’s most notable conflicts occurred with the Argentine government following the country’s debt default in 2001. The firm declined to participate in a debt restructuring and instead pursued legal action in U.S. federal court, ultimately securing a more than $2 billion settlement after a prolonged 15-year legal battle, during which the Argentine government labeled Elliott as a “vulture fund.”
Elliott is well-regarded for its proactive approach to activism, often drafting and disseminating letters that outline its criticisms and proposals for improvement to the companies it invests in. FactSet has included Elliott in its SharkWatch50 list, indicative of the frequency and intensity of its activist engagements. Notably, since its inception, Elliott has executed 252 activist campaigns across 225 companies.
A significant transformation occurred in 2015 when Elliott established Evergreen Coast Capital to manage its private equity pursuits, resulting in around 40 acquisitions, including notable firms like Barnes & Noble, LogMeIn, Gigamon, and Cubic. However, the Evergreen name was retired last year to eliminate any potential confusion.
Elliott’s campaigns chiefly focus on enhancing shareholder value and securing board representation to facilitate changes within struggling firms. Prominent targets have included Twitter, AT&T, and Samsung.
In 2020, Elliott acquired a stake in Twitter, leading to calls for the resignation of CEO Jack Dorsey. In 2019, the firm bought a $3.2 billion stake in AT&T, urging the company to divest certain assets before subsequently divesting its holdings. Regarding Samsung, Elliott acquired a $628 million position in Samsung C&T in 2015 and successfully challenged a merger with Cheil Industries, later receiving a compensation ruling exceeding $53 million.
Several firms pressured by Elliott have seen leadership changes, with CEOs at Crown Castle, NRG Energy, and Goodyear Tire & Rubber being replaced in response to Elliott’s activism. Most recently, Elliott’s engagement with Southwest Airlines resulted in the firm acquiring an 11% stake in the company, as it seeks significant changes including the removal of CEO Bob Jordan and board chairman Gary Kelly. Elliott has proposed a slate of ten directors for board positions, asserting its capacity to guide the airline towards improved operational and financial outcomes. In contrast, Southwest Airlines has implemented a “poison pill” strategy to thwart any attempts by Elliott to increase its ownership stake further, emphasizing that the forthcoming proxy battle represents a pivotal moment for the organization’s future.
Additionally, Elliott is pursuing representation on Starbucks’ board after building a sizable stake and influencing leadership changes, including the appointment of Brian Niccol, the Chief Executive Officer of Chipotle. The firm is also currently targeting Texas Instruments, where it holds a $2.5 billion investment, advocating for substantial financial and operational improvements.
Elliott Investment Management stands as a transformative force in the corporate world, wielding substantial influence through its systematic approach to shareholder activism and corporate restructuring. As it continues to identify and engage with companies in need of strategic revisions, Elliott remains a defining presence among activist investors.
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