Elliott Investment Management, founded by Paul Singer in 1977, has become a dominant force in activist investing, increasing its focus on larger companies. Known for its aggressive tactics, the Florida-based hedge fund managed $97.37 billion in assets as of November 4, 2024. Its latest activist campaigns in 2024 targeted firms with an average market value of $30 billion, a significant rise compared to previous years. The fund’s growing assets under management have enabled it to take on more substantial targets, reflecting an evolving strategy in its investment approach. Recent moves by Elliott highlight both strategic exits and calculated additions to its portfolio.
Why Did Elliott Exit Marathon Petroleum?
Elliott sold its entire stake of 7.37 million shares in Marathon Petroleum during the third quarter of 2024, a position it initially began building in 2019. As of June 2024, Marathon Petroleum represented 7.37% of Elliott’s disclosed equity portfolio, but the stock’s decline from a peak of $221.11 in April to $162.91 by September prompted the firm to capitalize on past gains. Estimated to have acquired the shares at an average price of $55.20, Elliott is believed to have generated close to $900 million in profits from this exit.
Which Stocks Gained Elliott’s Attention?
As Elliott exited Marathon Petroleum, it directed its capital towards other positions. Most notably, the hedge fund increased its stake in Southwest Airlines by purchasing 55.1 million additional shares, making it a significant holding. However, it also diversified into other areas, including Utilities Select Sector SPDR Fund (XLU), where it acquired 1.46 million shares of this ETF, which saw substantial gains in the past year. Additionally, Elliott invested heavily in put options tied to the SPDR S&P 500 ETF Trust (SPY), indicating a cautious outlook for broader markets. Lastly, the fund increased its Etsy holdings by 11.1%, acquiring 500,000 more shares, as the stock trades at levels last seen during the 2020 market downturn.
Earlier reports about Elliott’s activities over the years highlight a consistent focus on activist investments, yet a distinctive shift towards larger corporations is evident. In previous years, the fund engaged with smaller firms, reflecting its then-limited asset capacity. Today, its increased resources allow it to expand its reach and take more prominent positions in market-leading entities. Elliott’s transition to targeting larger companies underscores its growing influence in financial markets.
Elliott’s recent activity reveals a dual strategy: capitalizing on successful past investments while diversifying its portfolio with new opportunities. The fund’s significant allocation to put options on SPY suggests a defensive stance as it anticipates market volatility. Meanwhile, its increased stake in Southwest Airlines signals confidence in the airline’s recovery potential amid shifting industry dynamics. The investments in XLU and Etsy further reflect a mix of defensive and opportunistic approaches, balancing growth prospects with risk management.
The data suggest that Elliott’s strategic portfolio adjustments align with broader market conditions and its long-term investment philosophy. For investors, these moves may signal areas of interest to monitor, particularly in utilities and airlines. By shifting its focus to larger market players, Elliott underscores the increasing scope and financial clout it possesses to influence significant corporate decisions.
