With $32.6 billion under management, Elliott Management is a hedge fund with a track record of understanding the “hedge” component of their category definition. As he looks over today’s market situation and sees discomforting similarities with 2008, he readies for a repeat of history and starts to build dry powder. The fund’s ability to successfully hedge is a significant part of its success – as evidenced by raising $5 billion in one day recently. The skills of navigating through markets on the brink of danger – and then profiting in the wake of trouble – is what Elliott is about, a valuable asset management trait that Paul Singer thinks is about to get tested again.

Singer is not only hedged for this environment, a March 31 letter to investors reviewed by ValueWalk shows, but he is prepared for the aftermath of another significant market price adjustment.

Paul Singer Elliott Management
Paul Singer at the Davos conference By World Economic Forum (Flickr: The Global Financial Context: Paul Singer) [CC BY-SA 2.0], via Wikimedia Commons

Elliott Management – Hedging is what a “hedge” fund is all about

When he looks at the reasons for his investment success, Singer credits the firm’s ability to hedge risk at the top the list.

Make no mistake. Hedging risk and delivering strong investment returns is not easy, particularly as “hedging creates a significant headwind to profitability,” Singer noted.

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