Does Elliot Management Distressed Exist Anymore?
Curious if anyone has seen Elliot in distressed corporate names at all lately? And if not, wonder why the firm has shifted away from distressed if this really is a good time to be investing in the asset class?
Seems like I only hear about them in activist campaigns (primarily tech and industrial economy names) and a few older (usually energy related) distressed names (Peabody, Windstream equitable mootness case).
I assume they can get just layups in Activism/Equity and the macro/hedging strategies so is it a portfolio allocation to the best assets or something else?
Based on the most helpful WSO content, Elliott Management remains one of the most prominent distressed investors in the market. However, the nature of the asset classes means it’s far easier to deploy capital into public equities than into distressed, which is basically illiquid by comparison. Given their AUM, they need to deploy hundreds of millions if not often a billion+ for a real position and in recent years there have only been a small number of distressed situations where that opportunity even exists. So that fact alone means they’ll almost always have more money in equities than credit. That said, the distressed investments they make usually have a heavy activist angle to them.
So, it's not that they've shifted away from distressed investing, it's more about the opportunities available and the ease of deploying capital.
Sources: Any info on Elliott?, Distressed Investing: This Time It's Different
Maybe its not a great time to be in distressed? Marketing guys like Bruce Richards/Howard Marks are talking up the next cycle because of the maturity wall but 12 months ago, there was going to be an issue with 2023's maturities as well, lol.
Its a crowded asset class with fewer large-cap situations for Elliott to deploy large sums of money into.
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