Hedge fund giant Elliott is looking more like a buyout shop as it brings in a BlueMountain exec to help run portfolio companies
- Hedge fund giant Elliott Management is creating a position to oversee operations of its portfolio companies, according to people familiar with the matter.
- It's the latest move that's positioned the activist investor to look more like a buyout shop, as the firm has sprouted a private-equity arm and one source familiar with the matter said it has more "control-type situations" in private equity, public equity, and credit.
- Elliott is bringing onboard Jon Weber, Carl Icahn's former chief operating and finance executive who most recently served as head of portfolio operations at BlueMountain Capital.
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Hedge fund giant Elliott Management is creating a position to oversee operations of its portfolio companies, in the latest move that's positioned the firm to look more like a buyout shop than a shorter-term investor, according to people familiar with the matter.
Elliott is bringing onboard Jon Weber, Carl Icahn's former chief operating and finance executive who most recently served as head of portfolio operations at BlueMountain Capital.
The hire highlights an evolution at Elliott, from an activist investor known for its aggressive tactics to one that also works collaboratively with management, sometimes for investment periods longer than is typical of the hedge-fund industry.
Details are still being hammered out as Weber settles into his second week at Elliott, sources said, but his responsibilities will entail overseeing a newly formed portfolio operations group, which will organize Elliott's operating partners under one umbrella.
The number of executives who will work in this group is still undetermined, but Elliott has contracted with operating executives in the past, though that has not before been part of an internally organized group.
Generally speaking, operating executives work with portfolio companies to improve efficiencies and create value. Responsibilities can entail finding executive talent, including CEOs and CFOs.
One source estimated that Elliott had at least a half dozen operating executives already, and that while the new group wouldn't be deploying the same number of executives as a traditional firm like KKR - which staffs more than 70 full-time operating execs - it would be "targeted" in its deployment of team members.
In 2015, Elliott launched Evergreen Coast Capital, a private equity arm that can buy companies outright instead of taking public stakes, with investments including software provider LogMeIn and healthcare technology firm, Athenahealth.
At the same time, the firm has more capital to deploy. The Wall Street Journal reported in November that it had raised $2 billion for private-equity style buyouts, citing unnamed sources familiar with the matter. Overall, it has more than $34 billion in assets under management, up from $22 billion seven years ago.
One of the sources familiar with Weber's hire said Elliott now has more "control-type situations" in private equity, public equity, and credit situations, where the firm is "seeking to be an agent of change."
In the past, Elliott has taken stakes and mounted campaigns to push for changes at public companies such as Hess and AT&T. Most recently, it made news when it mounted a $2.5 billion stake in investment firm SoftBank, which has backed technology companies including WeWork.
Weber is the latest departure to hit BlueMountain, which over the past year has seen turbulence as it comes under a new corporate owner, Assured Guaranty.
In October, the firm wound down its 16-year-old flagship fund, the $2.5 billion BlueMountain Credit Alternatives, to focus on its collateralized loan obligations business and it was announced that co-founder Stephen Siderow would leave the firm.
Reached on Tuesday, a BlueMountain Capital spokesperson declined to comment on Weber's departure.
Some of Weber's work at BlueMountain entailed helping portfolio companies run searches for CEOs and board members, and also oversee executive compensation and annual performance reviews, according to materials Weber posted on his LinkedIn profile.
Before his time at BlueMountain, Weber worked as an operating partner at investment advisor Anchorage Capital Group between 2010 and 2017. Before that, he was a managing director at Goldman Sachs between 2007 and 2010.
According to his LinkedIn bio, Weber headed a team within Goldman's special situations group to "drive operational value enhancement" where the firm was an investor in companies in the Americas and EMEA.
His bio said that he oversaw pre-investment assessment and value creation planning, post-investment operational oversight and review, as well as company-specific value enhancement initiatives.
Between 2003 and 2007, Weber was president and head of portfolio operations at Carl Icahn's Icahn Enterprises.
In that role, Weber reported to Icahn in overseeing companies in which Icahn had influence.
Weber served as CEO of metal recovery and industrial services company, Philip Services Corporation, as well as Viskase Companies, a supplier to the food service industry.