A Paul Singer protege is backing Elliott Management in pushing for a boardroom shakeup
Singer's $28 billion activist hedge fund, Elliott Management, earlier this year called to replace Arconic's chairman Klaus Kleinfeld and to nominate five board members. Elliott is the company's largest shareholder.
Now Lion Point Capital, a fund that was launched by one of Singer's former portfolio managers, is voicing its support.
Lion Point has a small holding in Arconic.
"Lion Point believes that the intrinsic value of Arconic materially exceeds the Company's current stock price, and we welcome and support Elliott Management Corporation's ("Elliott") plan to unlock this value," Lion Point's CIO Didric Cederholm and head of research Jim Freeman wrote in a February 15 letter to Arconic's board.
A copy of the letter was reviewed by Business Insider.
Cederholm previously was a portfolio manager at Elliott before he launched Lion Point in 2015 with $951 million, according to industry publication Hedge Fund Intelligence. Freeman was previously an analyst at Perry Capital.
In addition, the pair wrote that they recommended that the Arconic board "promptly engage with Elliott in discussions to implement a plan to enhance shareholder value."
This isn't the first time an Arconic shareholder has voiced support for Elliott. First Pacific Advisors, one of Arconic's largest shareholders, announced its support earlier this month, Reuters reported.
Lion Point, meanwhile, is one of Arconic's smallest shareholders, with the hedge fund holding a 0.22% stake in the company as of the end of last year, making it 44th in a ranking of stockholders, according to Bloomberg data.
That translates to a roughly $27 million in Arconic shares as of the end of last year, according to the Lion Point's most recent 13F filing.
Elliott managed $28.3 billion as of mid-year 2016, according to the HFI Billion Dollar Club ranking. A representative for Elliott didn't immediately comment.