History

Paul Singer created Elliott Associates in January 1977, starting with $1.3 million from friends and family. In its earliest years, the firm focused on convertible arbitrage

Convertible arbitrage

Convertible arbitrage is a market-neutral investment strategy often employed by hedge funds. It involves the simultaneous purchase of convertible securities and the short sale of the same issuer's common stock....

. However, since the 1987 stock market crash and early 1990s recession, the firm has focused primarily on distressed debt investing.

Business

Elliott is noted for its relatively high returns and low volatility

Volatility (finance)

In finance, volatility is a measure for variation of price of a financial instrument over time. Historic volatility is derived from time series of past market prices...

. During its 27-year history, Elliott has never appreciated more than 25% in a year but has still managed to achieve a 14.1% average annual return. Over its life, Elliott has outperformed the S&P 500

S&P 500

The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...

 by 130 basis points but with one third of the index's volatility.

Deals

A small portion of Elliott's portfolio is dedicated to distressed sovereign debt, most recently that of Argentina

Argentina

Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

 and the Republic of the Congo

Republic of the Congo

The Republic of the Congo , sometimes known locally as Congo-Brazzaville, is a state in Central Africa. It is bordered by Gabon, Cameroon, the Central African Republic, the Democratic Republic of the Congo , the Angolan exclave province of Cabinda, and the Gulf of Guinea.The region was dominated by...

. Elliott is well-known for its purchase of Peru

Peru

Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....

vian sovereign debt. Elliot purchased debt with a face value of $20 million for $11 million. After extensive and costly litigation and numerous attempts at reaching a settlement, the court awarded $58 million to Elliott, including past due interest. More recently, Elliott has exposed serious corruption in Congo-Brazzaville in its efforts to enforce judgments totaling more than $100 million in defaulted bank debt.

In May 2011 it was reported that Elliot Associates, wanted to put its directors on the board of the British transport firm National Express

National Express

National Express Coaches, more commonly known as National Express, is a brand and company, owned by the National Express Group, under which the majority of long distance bus and coach services in Great Britain are operated,...

and break up the company, selling off its assets.