Paul Singer - 10 Facts You Need to Know
Updated: Nov 1, 2022
From psychologist, to billionaire, Paul Singer is an individual that many traders and investors can learn from.
In this article I am going to discuss who Paul Singer is and the top 10 facts you need to know about Singer, including:
Who is Paul Singer?
And why is he so important?
For those who don't know, Singer is an American billionaire hedge fund manager of one of the oldest hedge funds on Wall Street, Elliott Associates L.P. and the founder of Elliott Management Corporation.
Like many of us Paul Singer attended university where he studied Psychology and then went on to obtain a J.D. from Harvard Law School.
You might be wondering how did Paul Singer go from law student to hedge fund manager?
In 1974 Singer decided to work as an attorney in the real estate devision of an investment bank, Donaldson, Lufkin & Jenrette, acquired by Credit Suisse in 2000. After 3 years Singer left law to create his own investment company where he founded his hedge fund Elliott Associates L.P. in 1977.
Now let's get to the reason you're really here! I'm now going to walk you through 10 Facts You Need To Know about Paul Singer.
1. Paul Singer Net Worth
Let's start off with something we are all dying to know, Paul Singer's Net Worth.
As of March 2021 Paul Singer's net worth is a whopping 4.3 billion USD or 3.09 billion Pound Sterling.
I know I struggle to comprehend this number, so let me try and put it into perspective. 1 billion dollar stacked bills are 124 times taller than Burj Khalifa, the tallest building on the planet, making 4.3 billion dollar stacked bills 532 times taller! I'm still struggling to imagine that!
So, how exactly did Singer generate his large net worth?
As I've already mentioned, in 1977 Singer left law to create his own hedge fund Elliott Associates L.P. with 1.3 million USD in seed capital from friends and family. Singer sustained losses in his early career leading him to a very risk-averse approach when investing. Due to this caution, Elliott Management has had only two down years since 1977!
In 2020 Paul Singer ranked #222 on the Forbes 400 list of the wealthiest Americans, #538 on the Forbes World's Billionaires List and #19 on the Highest Earning Hedge Fund Managers List in 2019.
2. Elliott Management Corporation
We now know that Elliott Management Corporation was founded in 1977 by Paul Singer, identifies as an investment management firm and is known as one of the largest activists fund in the world.
What you don't know is that in the early years Elliott Management focused on a long-short strategy, convertible arbitrage, involving the purchase of convertible securities and short sale of the same issuer's common stock.
But, Singer soon transitioned Elliott into a multi-strategy hedge fund. Over one-third of Elliott's portfolio was concentrated in distressed securities by 2009, I will dive deeper into Paul Singer's investing approach in fact three.
How much is Elliott's portfolio worth? As of 2015 Elliott's portfolio was worth over 8 billion USD!
Fun Fact: the branding for the company is actually Paul Singer's middle name 'Elliott'.
3. Singer's Investing Approach
Let's get to the nitty gritty stuff, how did Singer accumulate such a huge portfolio? As I previously mentioned, Singer primarily focused on distressed assets.
So, what exactly is the distressed assets approach? This approach involves buying up bankrupt firms' debt, it made Singer so famous that he became known for "strong-arming his way to profit".
Paul Singer bought up sovereign bonds cheaply, and the went after countries for unpaid debts. One of the earliest examples of this was in 1996 where Elliott bought defaulted Peruvian debt for 11.4 million USD.
Hold onto your seats, for this one! The former president of Peru, Alberto Fujimori, was attempting to flee the country due to crimes related to corruption. In retaliation, Singer confiscated his jet and offered an ultimatum where Fujimori could only leave the country in exchange for the 58 million USD payment from the treasury. And of course Fujimori accepted.
This is exactly where the AGGRESSIVE term comes from and Singer has been heavily criticised for using this strategy of purchasing sovereign debt. However, there are always two sides to the story - Singer set the model for a lucrative business and has been described as the pioneer for buying up sovereign bonds on the cheap.
A more recent example is when Singer became the owner of the Italian football club, AC Milan, in 2018 after the previous owner defaulted on a 37 million US dollar loan payment owned to Singer's hedge fund.
Supporters of this approach have said it "helps keep kleptocratic governments in check". Paul Singer himself has defended his business model - "a fight against charlatans who refuse to play by the market's rules".
What are your thoughts of Paul Singer's business model, do you agree or disagree with his methods? All I know, is Singer has had a very successful investing lifetime so far with only two years downturn!
4. Next Twitter CEO?
Will Paul Singer be the next CEO of Twitter?
Well, Singer's firm, Elliott, has taken a 1 billion USD stake in Twitter and as an activist investor we know Elliott pressures companies to make changes to its business, with the intention of improving the stock price. Can you guess where I am going with this?
Singer is known to be concerned with Jack Dorsey's dual role as CEO of Twitter and Square along with Dorsey's intention to move permanently to Africa. It was rumoured because of these things Singer was, and still is eager to replace Dorsey as CEO of Twitter.
Luckily for Jack Dorsey, Twitter and Elliott have agreed on a truce in March 2020 where Dorsey is still CEO but Twitter must shake up its board in return.
So to answer the question, will Paul Singer be the next CEO of Twitter?
For now, no!
But who knows what the future holds. I would definitely keep a look out for Paul Singer's next moves over the next couple of years.
5. Clairvoyant
Did Paul Singer Predict Covid-19?
Well not exactly.
But Singer did warn his employees in February to prepare for lengthy quarantines due to coronavirus which is more than a month before US officials started preparing.
What does this mean?
Well, whilst we were all still flocking to concerts, restaurants, sporting events and conferences, Singer was already planning for the disruptions to come.
Singer apparently wrote a letter to his employees informing them to stock up on medicines, food and water in preparation for a monthlong quarantine and warned against public places for the next few months.
Why is this so important? As global markets collapsed in March 2020, Elliott remained flat due to hedges offsetting losses elsewhere in the portfolio. The protected gains made earlier in the year, brought Elliotts return to 2.2 percent in the first quarter of 2020. To put this in perspective, on average, hedge funds fell approximately 7 percent in March 2020.
This is not the first time Singer has accurately predicted a crisis.
Do you remember The Global Financial Crisis of 2007/09? Yes, how could you not it is considered to be one of the most devastating Financial Crises in all time. But what you may not know, Elliott Management predicted this crisis and its consequences.
Any conspiracy theorists out there? How did Singer predict the disruptiveness the Financial Crisis and Covid-19 would bring? If you know any secrets about Singer I don't, let me know!
6. Bitcoins Biggest Hater
Not a week goes by these days without some kind of bitcoin talk. There has been a ginormous increase of bitcoin at almost 70 percent this year, reaching a record of 57,350 US Dollars in February 2021.
Let's find out what a billionaire hedge fund managers views on this hot topic are - a quick hint it's in line with most experienced investors view on Bitcoin.
Singer's thoughts on Bitcoin -
The mostly bald Singer wrote “Pulling out your hair is an option, though only if you have hair to spare, hiding under the bed to avoid people who gloat about being long Bitcoin can get…tiring. Deep breathing exercises can work, but only for short periods. We continue to press on for the day when we can say, ‘We told you so.’”
Wow Singer calm down, a bit dramatic there!
As I've already mentioned, this is the notion of most experienced investors. Now there are very few hedge fund manager such as Paul Tudor who have described Bitcoin as the "gold of the 1970s".
This fact is quite interesting but not surprising. As we know Singer is not scared to share his opinion and go against the masses, we have seen him be right many times when he has gone against the grain.
But do we think Singer could be wrong on this occasion? Only time will tell.
7. World's Most Feared Investor
Bad boy Paul Singer feared by most CEOs, rival hedge fund managers and even countries.
How on earth did he get this reputation?
Activist investor, Singer does not care what people think he has gone head-to-head with the most notable investor Warren Buffett, he has knocked off a few CEOs and world leaders on his way, these are just everyday things for Singer.
One very famous domino effect of Singer lead to the impeachment of South Korea's President, Park Geun-hye. Yes you heard that right, Singer's actions have led to a President impeachment!
I am sat here thinking there surely can't be any more people Singer has it in for, right?
Well, was I proved wrong. Here are a few names on Singer's list: Jack Dorsey, Elon Musk and Warren Buffett.
One thing I have learned from Singer is that his aggressive ways have been very successful and 99.9 percent of the time he gets his way, I know I will definitely not want to go toe-to-toe with this ruthless man, would you if you had the chance?
8. 'The Giving Pledge'
On a more lighter note Singer isn't all bad, he is actually a very philanthropic. Singer has reportedly signed 'The Giving Pledge' signalling a promise to donate more than half of his wealth during his lifetime.
He has also founded the 'Paul E.Singer Family Foundation' which provides support to charitable causes such as the 'Harvard Graduate School of Education', 'Food Bank For New York City' and the 'Lukemia & Lymphoma Society', to name a few.
Singer is also responsible for 'The Philos Project' which is a pro-Israel Christian Organisation. After the Pittsburgh synagogue shooting Singers family foundation donated 1 millions US Dollar to upgrade security at Jewish institutions in New York.
9. Republican Who Supports LGBTQ
This may seem a very strange combo to some, hated by a minority and very progressive to a majority.
Singer has been a very active participant in the Republican Party also known as the Grand Old Party (GOP). In fact, Singer is one of the most powerful GOP donors with total contributions equalling to $16,674,527 in the 2020 cycle.
Singer is very insistent on supporting candidates who share his hatred for an over-meddling government in the financial industry. Surprisingly though as a Republican supporter, Singer had no intention for Trump to win the 2016 election and instead supported Marco Rubio by donating 1 million US dollars to the Our Principles PAC with hopes of derailing Donald Trumps campaign.
Singer refers to himself as a "self-proclaimed conservative libertarian". This leads us nicely into the second half of Fact 9.
Singer actively seeks to persuade other Republicans to support gay marriage and has joined other Wall Street executives supporting LGBT equality stating the same-sex marriages promotes "family stability" and Singer has said that in a time when "the institution of marriage in America has utterly collapsed," the fact that gay couples want to marry "is kind of a lovely thing and a cool thing and a wonderful thing."
Singer's son Andrew (pictured below) who married his husband Corey Morris in 2009 also has financially supported the legalisation of gay marriage in New York and Maryland.
At first, it wasn't easy for Singer to accept this. When his son, Andrew, first told his father, Singer's initial reaction was "[I reacted] with fear and nervousness, I worried about the health aspects ... grandfather-hood". Singer eventually became a steadfast supporter of gay rights.
Singer is so strong minded and even as a lifetime Republican he still stands up for what he believes in no matter what the majority view is. Something we can all try to apply in our own lives - don't be scared to have a different opinion or viewpoint and have the confidence to voice it.
10. Trading With Dad
To finish off, Singer's interest in finance came when he traded with his father, a classic father-son bonding experience. This went south when Singer admitted to making the majority of his losses at this time. When asked if this was painful he responded absolutely yes they were painful!
Paul Singer did not give up here, he instead diverted the focus from pain to a lesson and this is where his obsession with risk management stems from.
An important lesson for all new traders, including myself, it is okay to loose but it is not okay to dwell over the pain of the loss.
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