Who is Paul Singer, the man nicknamed “the most feared investor in the world”?

Activist investor targeting Suncor has long track record

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Before targeting Calgary-based oil producer and refiner Suncor this week, billionaire Paul Singer tangled with world leaders to secure debt repayments, pushed to oust Jack Dorsey as Twitter CEO and was dubbed “the world’s most feared investor” by Bloomberg for his aggressive attitude and contentious tactics as an activist investor.

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Although the 77-year-old is not as flashy or public as activists such as Bill Ackman and Carl Icahn, his hedge fund, Elliott Investment Management LP, has a reputation for finding and successfully exploiting weaknesses. His business goals span industries from technology and telecommunications to entertainment and energy and have helped him amass a fortune of US$4.3 billion and a place on the Forbes rich list.

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“The team at Elliott Management is very sophisticated,” said Andrew MacDougall, a partner at the Toronto law firm Osler, Hoskin & Harcourt LLP, who specializes in corporate governance and shareholder activism. “They have a track record of success.”

In the 1990s, for example, Singer’s company bought up the troubled sovereign debt of countries like Peru and Argentina, resulting in multimillion-dollar repayments, sometimes after years of litigation. Such tactics, which also included corporate debt games at companies such as Caesars Entertainment Corp., earned him the title of “doomsday investor” in a 2018 article in The New Yorker magazine.

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His company, which managed $51.5 billion in assets as of December 31 and is in its 45th year in business, posted an annualized return of about 13% in the middle of last year. She only lost money for two of those years.

They have a track record of success

Andrew MacDougall

Elliott launched 17 activist campaigns last year in the United States, according to a 2021 review of shareholder activism by Lazard’s Capital Markets Advisory Group, leading the pack and representing the most active year of the New York-based company since 2018.

Notable campaigns included an overboard showdown composition and a push for strategic review at Charlotte, North Carolina-based Duke Energy and a management challenge at pharmaceutical giant GlaxoSmithKline PLC.

Software company Citrix Systems, also targeted by Singer’s company, agreed in January to be taken private by affiliates of Vista Equity Partners and Elliott Investment Management LP, in an all-cash deal valued at $16.5 billion, including Citrix debt assumption.

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However, Singer doesn’t always win. Its battle with Twitter ended in compromise in 2020, for example, with board changes and Dorsey still at the helm. The following year, however, Dorsey had resigned.

A Suncor Energy Inc. oil refinery near the Enbridge Line 5 pipeline in Sarnia, Ontario.
A Suncor Energy Inc. oil refinery near the Enbridge Line 5 pipeline in Sarnia, Ontario. Photo by Cole Burston/Bloomberg Files

This week, Elliott set his sights on Suncor, criticizing the oil sands laggard for “repeated operational challenges” and safety issues.

Elliott Investment Management has accumulated a 3.4% economic stake in Suncor and is using it to push for a review of the company’s management and assets and to demand changes to the board of directors, including the installation of five new directors.

In a letter to Suncor, Elliott partner John Pike and portfolio manager Mike Tomkins complained of “missed production targets, high costs and, tragically, a number of employee deaths and other security incidents” within the oil company.

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Investors reacted to the arrival of the activist company by pushing Suncor shares as high as $47.80 on Friday morning, from $42.15 on Wednesday, before pulling back slightly to close at $46.18.

Singer, who grew up in New Jersey and studied psychology at the University of Rochester before earning a law degree from Harvard, was credited among those who correctly predicted the 2008 financial crisis – profiting handsomely from swaps on credit default who bet that leveraged companies would fail. He also warned staff in February 2020 to prepare for a lengthy period of quarantine, Bloomberg reported. Although COVID-19 had started to emerge outside of China, the declaration of the global pandemic was still over a month away.

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He gives few interviews and even when he spoke to Euromoney in 2004 he refused to be photographed, telling the reporter he preferred the story to be about his business. Singer reveals in this article, however, that his “risk consciousness” was forged by a series of unforeseen events and a bear market in the 1970s.

The Euromoney article also includes an oft-repeated anecdote about how Singer lost a lot of money the first time he tried his hand at stock investing. In all accounts, the young man tried stock picking with his family’s money, although some say the money belonged only to him and his father.

After law school, he worked in the real estate division of Donaldson, Lufkin & Jenrette, an investment bank that was later acquired by Credit Suisse. In his early thirties, he left investment banking to start his own business with capital of around $1 million.

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One of his two sons, Gordon, now works with him.

Although he kept a relatively low profile for many years outside of his activist campaigns, Singer gained some public visibility in 2018 when he acquired AC Milan, a European soccer club that was once owned by the former Italian Prime Minister Silvio Berlusconi. In keeping with his investment philosophy, he took over the 119-year-old team when its owner, Li Yonghong, defaulted on a loan owed to the hedge fund.

But while the Republican billionaire is believed to be a football fan, Reuters reported this week that Elliott is set to sell the team, with Bahrain-based asset manager Ivestcorp the favourite.

Singer seemed to see the club as he does the companies he targets through activist campaigns: as a fixer.

“Elliott looks forward to the challenge of realizing the club’s potential and returning the club to the pantheon of top European football clubs where it rightfully belongs,” he said in a statement on acquiring the club. team a few years ago.

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