6/30/2026
Elliott’s Acolytes: How Paul Singer’s Hedge Fund Became a Spinout Factory
Financial Times (06/30/26) Pollard, Amelia; Barnes, Oliver
Elliott Management alumni are extending Paul Singer’s influence on Wall Street, as former staff use lessons learned at the $80 billion investor to launch firms of their own. Members of the “Elliott diaspora,” as some former staffers call it, have founded at least seven hedge funds since 2020, mirroring the “Tiger cubs” that came out of Julian Robertson’s Tiger Management around the turn of the millennium. They include Adam Katz’s Irenic Capital, Dan Gropper’s Carronade Capital, Quentin Koffey’s Politan Capital, and James Smith’s Palliser Capital. Unlike Robertson, Elliott has not invested in any of the new firms, according to two people familiar with the matter. But even so, they have begun to find success in the same field. “Elliott is a sophisticated investor, and people trained there tend to understand how to employ activism as a precise tool, not simply as a blunt instrument,” said one senior banker. “There’s a reason most defense advisers would rather have Elliott or one of its [alumni] across the table than a less disciplined activist.” That Singer has started to amass his own lineage is a sign of his 49-year-old firm’s transition from a pugnacious hedge fund to a Wall Street institution with more than 600 employees. It now manages $80 billion compared with about $30 billion a decade ago, and while it has struggled to keep up its momentum on returns in recent years, a new Elliott position has become so influential that its activism is often a self-fulfilling prophecy. When the hedge fund unveiled its stake in Honeywell two years ago, the company’s stock rose nearly 5%. But its targets also need to be increasingly large to move the needle, according to people familiar with the firm, creating opportunities for new funds that have the flexibility and interest in going after smaller companies. Elliott’s scale means it has yielded many more spin-offs than rivals such as Starboard Value or Trian Partners, according to data from research firm Def 14. But it also has a distinctive approach, which firms such as Irenic and Carronade have tried to emulate. Having waded into equity activism in the mid-2000s under the direction of Jesse Cohn, a wunderkind who has gone on to become a managing partner, Elliott now does everything from boardroom fights to takeover battles and distressed-debt brawls, all while maintaining an unusually intense eye on levels of risk. The phrase Singer has used over the years to describe this phenomenon is “manual effort,” or the attempt to eke out better returns by sheer force of will and resources. Elliott will often have as many as 50 employees devoted to one investment. Another reason the hedge fund has proved to be a finishing school for Wall Street’s next generation of investors is Singer himself, who has run Elliott since its founding in 1977. “Paul was a great manager of people and he gave you rope,” said a former Elliott employee. “You either made it work or blew yourself up. But he was really good at enabling people.” Singer allows portfolio managers to take big swings, a luxury enabled by Elliott’s uncompromising approach to risk. Elliott tries to mitigate potential losses at every level of its investment through an elaborate web of hedges, according to two people familiar with the matter. Although this can be a costly strategy, it has given Elliott far greater precision in preventing losses. “I like to joke that you can fit everyone who knows how to do that in my office, and my office isn’t that big,” said the former Elliott employee. “If you didn’t work at Elliott, you don’t know how to do that.” While each of the newer hedge funds has its own style, one person close to Elliott described the firms as all running on the same “operating system." Carronade made 6.8% in the first five months of this year, with a 10.5% annualized return since its launch, according to people familiar with the figures. Irenic is up about 1%, after making 16% in 2025, according to people familiar with the numbers. Elliott is known for going after intensely complicated companies and situations that other investors might shirk away from. Firms such as Trian Partners or Starboard are primarily associated with high-profile campaigns designed to lift a company’s share price. Yet Elliott’s hallmark investments also often combine legal expertise, a savvy for credit documents and sometimes entire takeovers, as eventually took place with the $16.5 billion deal for software company Citrix in 2022. Another former employee said working at Elliott was particularly good for learning “how to prosecute a wide variety of weird and hairy and messy situations." Elliott offshoots have launched 50 campaigns since early 2023, according to Def 14, with targets as ambitious as Rio Tinto (ASX: RIO) for Palliser and News Corp (NASDAQ: NWSA) for Irenic. Some of these campaigns have clinched early wins. Katz’s Irenic engineered a sale of Wagamama owner The Restaurant Group to Apollo Global Management; Smith pushed FTSE 100 systems testing company Intertek (LON: ITRK) towards a sale to EQT; and Koffey took part in an almost $10 billion sale of patient monitoring group Masimo to Danaher (NYSE: DHR). But starting a hedge fund in Elliott’s shadow brings its own challenges. The reputation of the brand can lead to investors feeling pigeonholed. “Once you work at Elliott, you’re labeled an ‘enemy to corporate management’ teams for life and thus more or less stuck as an activist,” said one executive. Some of the Elliott offshoots have also struggled to emulate the hedge fund’s success. Sparta Capital, which was founded by former Elliott trader Franck Tuil, made a series of ill-timed bets shortly after it launched, including on Spanish company Grifols (NASDAQ: GRFS). In 2024, multi-manager hedge fund Balyasny pulled its $250 million investment in the fund. One person close to the fund highlighted that the positions were a small proportion of the overall bets the fund had made. “They have the same training but they don’t necessarily offer the same value proposition,” said one person familiar with Elliott. One investor in Elliott, who has been pitched by a handful of the new hedge funds, said these founders had learned the hard way that it was difficult to replicate what Singer had pulled off since the 1970s. “You cannot recreate what you did at Elliott because the costs are so enormous,” they said.
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