Billionaire Paul Singer of Elliott Management has been described by Bloomberg as “the world’s most feared investor”. Other outlets have referred to his $35 billion hedge fund in somewhat less glowing terms, with “vulture fund” ranking highly on that list due to the firm’s tendency to prey on distressed companies or situations and attempt to profit from them by extending costly loans or through other tactics.
Such a situation occurred earlier this year in one of the firm’s most interesting moves to date, as Elliott Management took control of famed Italian football squad AC Milan. Li Yonghong, who had received a €300m ($341.45 million) loan from Elliott last year to help purchase the club, defaulted on a €32m ($36.42 million) payment after the interest rates on the loan jumped to 24% from 11%. Li later admitted he made a mistake (ostensibly by accepting Elliott’s loan) and criticized the fund in an open letter, describing their conduct as “careless and predatory”.
While the list of Paul Singer’s detractors may be growing, so has his bank account. His estimated personal fortune of $3.2 billion ranks him 656th on Forbes’ real time ranking of the world’s richest people. His hedge fund’s 13F portfolio has also exploded in value over the past three years, rising to $22.81 billion by the end of September from just $5.22 billion three years earlier.
In Q3, the fund became bullish on utilities stocks, as they jumped to 17.47% weighting within its 13F portfolio from less than 2%, while its exposure to tech stocks was slashed by nearly 11 percentage points to 24.04%. The fund added 12 new holdings to its portfolio during the quarter, while closing 17 positions, including its small bet against Alibaba Group Holding Ltd (NYSE:BABA), one of the 30 Most Popular Stocks Among Hedge Funds.
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On the next page we’ll check out four holdings that Elliott Management was buying during Q3, as well as one it sold off.