Paul Singer doesn't like being compared to other hedge fund
managers--even if Elliott Management Corp. easily beats most of
|| Paul Singer
"We also try really hard not to be benchmarked against other
funds, in order to create as much 'breathing room' as
possible," Elliott 's July 30 letter to investors said.
"Sometimes we do well and sometimes we struggle, but the last
thing we want to hear when we hit a soft patch (and the least
helpful when trying to dig our way out) is a question about our
performance relative to someone else's."
The comments come as the flagship multistrategy Elliott
Associates fund (onshore) is up 5.3% net of fees through June.
As Elliott itself notes in the letter, the S&P 500 Index
(with dividends) rose 13.8% and the Citigroup Broad
Investment-Grade Bond Index fell 2.5%. The
Absolute Return Multi-Strategy Index, which tracks other
hedge funds investing in a range of markets, was up 4.31%
during the same period.
Most brand name competitors were roughly in line with both
Elliott and the Absolute Return index. Examples of
large multistrategy funds include GoldenTree (up 5.38% through
June); Highbridge (3.63%); Hutchin Hill (10.09%);
Millennium (5.99%); Och-Ziff (6.48%), Perry (9.35%);
Pine River (6.83%); and York (5.11%).
"The fact is that sometimes when we outperform another fund,
their results should actually be viewed more favorably than
ours because we should have done even better, and sometimes the
opposite is true," the Elliott letter said. "But as much as we
sympathize with investors who want a basis for understanding
when their managers are doing well or not, benchmarking is not
helpful to us. We are proud of our very long-term consistent
results obtained with an extremely low variability of return.
That result is what really counts - not what the other person
Those long-term results are indeed impressive. Elliott
Associates has produced a net annualized return of about 14%
from its February 1977 inception through June 2013. Elliott's
long-term record is one reason it was the eighth largest firm
in the Americas at the start of this year. In the decade from
2003 (when Absolute Return began publishing)
through 2012, Elliott's flagship fund compounded at 13.72%.
top 10 firms of 2013, that put Elliott behind only Baupost
(14.8%) and Bridgewater (14.53%). The
Absolute Return Multi-Strategy Index produced a net
annualized return of 8.62% during the same period.
"During periods of complacency and overpricing (the two
usually go hand-in-hand), the task is to erect portfolio
defenses and try hard to make some money without stretching
parameters," the letter said. "It is not thrilling to make
single-digit rates of return, but at times that result may be
all that we can achieve under the circumstances."
Peter Truell, a spokesman for Elliott, did not respond to a
request for comment.
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