Billionaire activist investor Paul Singer has been called “The Vulture Lord” and
a “bloodsucker” by the former Argentine President Cristina Fernández de Kirchner
He’s also been labelled a “raider” and a “profiteer.”
He's feared the world over for hostile boardroom takeovers
and profiting from debt-laden countries.
He’s so powerful, he brought Argentina to its knees and set off a chain of events that
led to the impeachment of South Korea’s president in 2017.
Reviled by some, admired by others, he’s also been described as a “guru” and "one
of the most revered" hedge fund managers on Wall Street.
“If someone had invested with you at the beginning, what kind of rate of return would
they have compounded over forty years?”
“1 dollar became, like, 160-165 dollars…”
“When Paul Singer talks, people tend to listen”
In the world of finance, Singer is recognized as one of the most famous “Activist Investors”.
Once known unflatteringly as “Corporate Raiders”, think merciless money-makers like
Wall Street’s Gordon Gekko
“Greed, is good”
Typically they used junk bonds to buy stakes in companies and then leveraged
their positions on boards to boost undervalued stock and oust management.
“You either do it right, or you get eliminated”
They might have evolved since Gordon Gekko’s day, but the way activists operate is still contentious.
Scott Deveau is Bloomberg’s shareholder activist reporter.
Activism is doing all that work to assess value and then taking steps
to impact the direction of the company.
Singer’s fund - Elliott Management, Elliott is his middle name - has a tough and brutal
reputation.
When it invests in a company and an executive isn’t on board with their plans, they’re a target.
“Activist investor Paul Singer takes another shot at Samsung’s Lee family”
Jay Y. Lee, the Vice Chairman of Samsung was jailed
after he bribed another investor to vote against Singer.
Former Arconic CEO Klaus Kleinfeld resigned when he lost his cool with Singer
during a proxy fight for control of the company.
And more recently, Telecom Italia CEO Amos Genish got the axe after resisting Elliott’s restructuring plans.
The list goes on.
It’s fair to say Singer makes execs nervous.
While he’s been condemned for allegedly employing bullying tactics,
Singer doesn't very about his reputation. He sees it as a selling point for his investors.
"It’s good when a corporate executive listens with the understanding that we are real."
Shareholders are equally relaxed. When Singer’s company buys stock, his reputation can often
be enough to raise the price.
But he wasn’t always successful.
As a young man Singer started to play the stock market with his father and learnt quickly.
“He and I found just about every possible way conceivable to lose money, so when I started Elliott
I was determined to engage in a trading strategy that made money all the time.”
He started Elliott Management in 1977 after a stint as a real estate lawyer.
His legal background would become invaluable though as he forged a path toward activism.
By the 1980s his fund started buying distressed debt from companies in,
or on the verge of, bankruptcy.
By the mid nineties Singer’s fund began buying something different - sovereign debt.
He made millions extracting payments from Peru and later, the Republic of Congo.
But Argentina would become the one that made him respected -
and despised - around the world.
“New York billionaire Paul SInger is Argentina’s public enemy number one”
The UN had to intervene and the Libertad was eventually released a few months later.
After fifteen long years of legal battles the country agreed to pay up.
Critics condemned Singer’s targeting of a weak country as immoral --- half the population
was living in poverty after the country’s default in 2001 --
But Singer saw it differently… He laid the blame at corrupt officials.
Undeterred, Singer and his hedge fund went on to raise more than five billion dollars
in just 24 hours in May 2017 -
The fund is now worth an estimated $35 billion.
In the first half of 2018 Elliott initiated 17 activist campaigns,
vastly outnumbering the competition.
Paul Singer still has plenty of appetite for activism if he sees value in a company.