5/3/2024
Elliott’s Coolheaded Copilot
Institutional Investor (05/03/24) Segal, Julie
Jonathan Pollock, who runs the $65 billion hedge fund Elliott Management side by side with founder Paul Singer, joined Elliott in 1989, when it had approximately 20 employees and $250 million in assets. Now it has almost 600 employees. Pollock has been the go-to guy — the levelheaded executive needed to reset relationships — whenever the firm’s deals have hit trouble. “Most of the time, it’s because we have some sort of problem, it got emotional,” Pollock said in a rare interview. “I tend not to be that emotional. I've only been deeply involved in a position if it's come off the rails.” It works best when there are fewer fires, he said. Pollock, 60, one of the most powerful people on Wall Street, is not well known outside the firm and beyond Elliott's investors. Elliott, like most hedge funds, has long wanted more institutional investors. And institutional investors have long wanted fewer fires, fewer headlines about the inevitable mistakes, and fewer public showdowns. That meant Pollock needed to transform Elliott from a loose collection of hypercompetitive investors who disdained bureaucracy — and often didn't communicate with each other — into a firm with processes in place to get to better and more consistent answers and to more effectively tap into the expertise of its people across teams and get them to weigh in on all investment decisions. For decades, Elliott didn't even have its own general counsel, though the firm has relied on legal strategies and scores of lawyers to pore over legal documents looking for loopholes that might unlock profits rivals missed. So Pollock decided to get the firm a lawyer, hiring Richard Zabel as the firm's first general counsel that year. Pollock also brought in a chief operating officer, Zion Shohet, who headed the global regulatory reform and implementation group at Citigroup (C) after the financial crisis. Like Zabel, Shohet wanted to know the firm was serious about institutionalizing. “You always wonder in the back of your head, especially when you're joining a new spot, do they mean what they say, right? Are they going to back me when we're going to have hard decisions to make?” Pollock assured him he would. “At every turn, that commitment has been there,” says Shohet. One source describes Pollock as being able to anticipate the problems and hurdles of any investment: “He's a second- and third-order thinker.” Others note that he can methodically “wade through” an almost endless stream of information about a potential or existing position and see through to the few critical questions that need to be answered or remember obscure parts of similar situations from years before that might provide insight. He draws on a “database of mistakes or successes that he's made in investing,” says one source. In 2020, Pollock pushed for one of Elliot's biggest changes, establishing a firmwide investment committee for the first time and reorganizing around business lines rather than geographies. Because many hedge funds have sprung from the minds and tenacity of one or two people, that structure often remains even after decades of growth, thinning the bench and frustrating talented people who crave bigger roles.
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