Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

This public program was initiated in collaboration with The Conference Board Task Force on Corporate/Investor Engagement and with Thomson Reuters support of communication technologies. The Forum is providing continuing reports of the issues that concern this program's participants, as summarized  in the January 5, 2015 Forum Report of Conclusions.

"Fair Access" Home Page

"Fair Access" Program Reference


Related Projects 2012-2019

For graphed analyses of company and related industry returns, see

Returns on Corporate Capital

See also analyses of

Shareholder Support Rankings




Forum distribution:

The next phase of activist evolution


Source: Financial Times, January 27, 2014 article > companies > financials >

Financial Services


January 27, 2014 5:33 pm

Elliott makes waves with activist broadsides

By Ed Hammond and Stephen Foley in New York

Elliott Management, the US hedge fund, timed its recent attack on Juniper Networks carefully.

Shaygan Kheradpir, the technology company’s new chief executive, had been in the job less than a fortnight when Elliott revealed it owned 6.2 per cent of Juniper’s shares and wanted changes in the way it was managed. Mr Kheradpir had barely had time to organise his new desk, let alone lay out his own vision for the business.

The manoeuvre is typical of Elliott. The company, until recently little known outside the corporate finance world, is cutting a reputation as an aggressive and adroit activist investor, hungry to take on businesses across America and Europe.

Elliott, founded by Paul Singer more than 35 years ago, has long been associated with the more traditional hedge fund practice of distressed debt investing.

Until recently, the company was best known for engaging in a protracted fight with the Argentine government over its refusal to accept the terms of the country’s proposed debt restructuring.

After winning a court order awarding it $1.6bn in Argentine assets, a subsidiary of Elliott arranged for the seizure of ARA Libertad, a $10m, 100m-long sailing ship that operates as a school vessel in the Argentine navy.

However, the $23bn fund has been allocating more of its resources to corporate activist situations, in part because those kinds of distressed debt opportunities have ebbed. Defaults are at record lows and most companies are presently having little difficulty refinancing.

At the same time, corporate activist investing has proved lucrative at a time of rising equity markets. According to eVestment, a data provider, corporate activism was the best-performing hedge fund strategy in 2013, as specialist funds returned 19.1 per cent for the year compared with 9.2 per cent for the hedge fund industry as a whole.

Elliott’s particular brand of activism lacks the effrontery that has made celebrities of Carl Icahn, Bill Ackman and Daniel Loeb. But in the scope of its activity, the hedge fund stands out from the pack.

}[Jesse Cohn] made a name for himself by not being afraid to challenge the status quo of these companies that a lot of outsiders view as being among the most sophisticated and intelligent businesses~

― Silicon Valley banker


Since the start of 2014, Elliott has taken a stake in Wm Morrison, the struggling UK grocer, forced a higher price in McKesson’s acquisition of rival drug distributor Celesio, and prompted a reshuffle of the board of directors at business software group Compuware.

A theme running through the hedge fund’s approach, say its executives, is “manual labour” – the idea that returns are to be generated by actively pushing for change, whether that be at a bond issuer that has fallen into difficulty, or a sovereign issuer that needs to be pressured to treat creditors better, or at a company with poor operational performance, an unhealthy balance sheet or weak management, or all three.

Yet, to gain a better perspective of Elliott’s stature among activist investors, it pays to look to the technology sector.

Led by Jesse Cohn, an energetic 33-year-old who grew up as a self-described computer programming geek, Elliott has rewritten the playbook for taking on America’s technology companies. Mr Cohn, who heads the hedge fund’s activism practice in the US, has turned the insularity of Silicon Valley – the very characteristic that many investors would regard as a barrier to engendering sweeping change – into a weapon in the launch of campaigns against 30 companies in eight years.

It is a pre-eminence that was sparked by a chance moment in 2005.

Elliott was weighing the merits of taking a small stake in Enterasys Networks, a little-known maker of internet routers. The then 25-year-old Mr Cohn’s interest in technology landed him the responsibility for the investment. Elliott pressured Enterasys’s management to sell the company to a private equity buyer, doubling its money in the process. Mr Cohn was readily given the task of finding more opportunities in the sector.

One Silicon Valley banker, who did not want to be identified, says Mr Cohn has “made a name for himself by not being afraid to challenge the status quo of these companies that a lot of outsiders view as being among the most sophisticated and intelligent businesses”.

The strategy has drawn criticism too.

Elliott’s pursuit of Riverbed, a technology group that it is pushing to sell itself, has been questioned by some in Silicon Valley as being an underestimation of a respected board with a willingness to yield.

Even its move on Juniper – which sent shares rallying 8.6 per cent and has since been backed by rival activist fund Jana – has been questioned as being merely an amplification of the changes the company was already enacting, such as cutting costs and increasing its dividend.

Whether these, or other criticisms of Elliott’s approach will bring much in the way of comfort to Mr Kheradpir remains to be seen.

Copyright The Financial Times Limited 2014.



This Forum program was open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the purpose of this public Forum's program was to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant was expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated in 2012 in collaboration with The Conference Board and with Thomson Reuters support of communication technologies to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices. The website is being maintained to provide continuing reports of the issues addressed in the program, as summarized in the January 5, 2015 Forum Report of Conclusions.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.