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Overview: Assessing Elliott Management’s 2Q14 positions

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Overview

Paul Singer’s Elliott Management, a New York hedge fund, disclosed new positions in a 13F filed this month. In this series, we’ll discuss some of the notable positions the $24 billion activist fund traded in the second quarter of 2014 (or 2Q14). The total value of the fund’s portfolio increased to $7.15 billion in 2Q14 from $5.05 billion in 1Q14.

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The fund’s largest new buy in 2Q14 was Hittite Microwave. It was acquired in June by Analog Devices in a $2-billion deal and subsequently delisted. Other notable buys include the newly debuted Opus Bank (OPB), Iron Mountain (IRM), and Mallinckrodt plc (MNK).

The fund exited a position in Hornbeck Offshore Services (HOS). The fund upped its stakes in Anadarko Petroleum (APC) and Williams Companies (WMB). The fund’s top ten positions are outlined in the table below.

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During the quarter, the activist hedge fund took a $1-billion stake that was worth ~2% in the storage company EMC (EMC), with the intention of pushing the spinoff of VMware (VMW), its cloud and virtualization software unit. Elliott also disclosed a 6.7% stake, which is valued at ~$570 million, in Interpublic Group of Companies (IPG).

A newswire report cited the fund’s latest 2Q14 investor letter. It stated that during the first half of 2014, the Elliott Associates portfolio increased 4.6%, while the Elliott International Limited fund increased 4.1%.

Elliott has been previously successful in bringing about changes at technology companies such as Juniper Networks (JNPR). It recently called for a “dramatic change” at another target, Riverbed Technology (RVBD), urging the board to hire an advisor for exploring strategic alternatives. Elliott owns a 10.5% stake in Riverbed, a network equipment maker, which has twice rebuffed the hedge fund’s takeover offer earlier this year.

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