Feared American vulture hedge fund Elliott has been ramping up its power over UK business after amassing an unrivalled war chest.
The firm has been snapping up stakes in the companies behind some of the UK’s best-known brands, demanding changes including break-ups, takeovers and restructuring.
Founder Paul Singer raised £3.5billion in 24 hours last May after pledging to take advantage of turmoil caused by market distortion due to government policies.
Power: Paul Singer, founder and chief executive of hedge fund Elliott
Investors poured cash into the 72-year-old’s fund, which has ruthlessly taken on some of the world’s biggest companies and is notorious for impounding a ship belonging to the Argentinian navy to try to collect a debt from its government. It has since become increasingly active in the UK and Europe.
Elliott now has more than $34billion (£24billion) assets under management and is poised to gain an even greater foothold in the UK.
Its latest battlefront emerged last week as it revealed it has a 1.5 per cent stake in Hammerson, the shopping centre firm behind the popular Bicester Village in Oxford.
The move triggered speculation it is plotting change at the turmoil-hit firm that has just ditched a planned £21billion merger with rival Intu after a backlash from investors.
A week earlier Elliott revealed a more than 6 per cent stake in Costa Coffee and Beefeater restaurant owner Whitbread, worth about £460million. It is understood it will now push for the firm to split its Costa and Premier Inn divisions in the belief this would increase share prices.
What does Elliott want?
÷ Hammerson (1.5 per cent stake worth £66million): Management change or sell divisions
÷ Whitbread (6 per cent stake worth £460million): Break up
÷ Sky (2.8 per cent stake worth £366million): Bump up 21st Century Fox’s £11.7billion offer
÷ Fidessa (4 per cent stake worth £68million): Pushed through takeover
÷ GKN (3.8 per cent stake worth £284.4million): Backed takeover
÷ BHP (4.6 per cent stake worth £1billion) Management change and sale of oil business
÷ Akzo Nobel (5 per cent stake worth £880million): Engage with bidder
Last week Elliott revealed it has a 1.5 per cent stake in Hammerson, the shopping centre firm behind Spitalfields in London
UK businesses have become cheaper for overseas business since the fall in the pound following Brexit.
When it raised its war chest last May, Singer likened the markets to a ‘coiled spring’ with opportunities that could emerge because they had been distorted by years of economic stimulus following the financial crisis.
In a letter to investors at the time, Singer said the funds would be used toward the ‘possibly large opportunity set that could emerge when investor confidence is impaired, recent correlations and assumptions don’t work, and prices are changing rapidly’.
Elliott also recently revealed a more than 6 per cent stake in Costa Coffee owner Whitbread
He added: ‘We are at an extraordinary juncture in markets and in the prospects for trading and investing.’
This year Elliott has also disclosed a 2.8 per cent stake worth around £366million in Sky, potentially adding pressure on 21st Century Fox to increase its offer for the company.
Elliott also played a major hand in the takeover battle for GKN. About one week before the shareholder vote last month it revealed a 3.8 per cent stake worth around £284million, helping City predator Melrose win with 52 per cent in favour.
And it has become embroiled in the takeover battle for technology firm Fidessa Group, revealing on February 21 that it had a 4 per cent stake worth £68million.
Elliott declined to comment.