Paul Singer is having a hell of a time these days, writing sharply worded letters, launching proxy contests, scaring the shit out of management and watching his enemies destroy themselves. But he knows that, like decade-long battles with uniquely recalcitrant debtors, all good things must come to an end. And Singer’s got a pretty good idea of how things will come to an end, mainly by the realization of his prophecy last July that a Donald Trump presidency would be “close to a guarantee of a widespread global depression.” This belief has apparently survived Singer’s coming to terms with the reality of President Trump, which now seems to be more like the sense of resignation he once felt about his Argentine prospects than a full-throated endorsement of whichever aggrieved whim the president is pursing at the present moment.
In a letter to investors earlier this month, explaining why they were opening to new capital, Mr Singer said he believes “that there has never been a larger (and more undeserved) spirit of financial market complacency in our experience”.
He said they were looking to raise money now, before there is a “financial market meltdown” in which its potential investors might be unable to deploy more to hedge funds like Elliott.
And they seem to have gotten in just under the wire, raising $5 billion just before the wheels on both the Trump trade and the Trump presidency really started to come off. Now, they’ve got to be ready to deploy it amidst a major downturn, during which hectoring letters and even flashy video mailers might not produce the same results as during irrational upswings. And as luck would have it, there happen to be some talented distressed debt traders on the market at the moment.
“A resurgence in distressed situations coincides with the business cycle,” Mr Pollock said. “We are well-positioned for any opportunities that we may see in credit or as a result of a substantial bankruptcy.”
Hires include Jeff Rosenbaum, a former director in the credit group at York Capital Management, who joined Elliott in October last year.
“In a time when some really talented people are available we have been able to make some hires in stressed and distressed credit,” Mr Pollock said.