Friday was a big day for Paul Singer’s Elliott Management Corp. Shares of Polycom soared nearly 13 percent to close at $12.25 after it agreed to be acquired by private-equity firm Siris Capital Group for $12.50 per share. The video-conferencing equipment maker also terminated its previously announced deal to merge with rival Mitel Networks Corp. The earlier deal was championed by sometimes-activist hedge fund firm Elliott, which owns sizable stakes in both Polycom and Mitel. On July 7, Mitel waived its right to renegotiate its merger agreement with Polycom, according to the merger announcement.
Mitel investors don’t seem too upset over the news. The company’s stock raced ahead nearly 20 percent on Friday. “This is a great outcome for all parties involved,” wrote Jesse Cohn, senior portfolio manager at New York-based Elliott, in an emailed statement, according to Reuters. At the end of the first quarter, Elliott was the third largest shareholder of Polycom and the largest shareholder of Mitel. Other top-ten Polycom holders included New York-based Soros Fund Management and New York-based AQR Capital Management. We reported in October that Elliott sent an 11-page letter to Polycom’s board urging the Mitel merger—the hedge fund firm had earlier discussed such a move with Mitel. Elliott also disclosed it had a passive investment in another industry player, ShoreTel. Its stock surged nearly 9 percent on Friday.
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Chris Hohn’s London-based TCI Fund Management is up 2.8 percent for the year through June. This is better than many activists, which are down for the year. The most visible example of activist futility this year is William Ackman. The New York activist’s public hedge fund, Pershing Square Holdings, managed by Pershing Square Capital Management, posted a 3.1 percent loss in June. This brought its loss for the first half of the year to 21.1 percent. It then declined another 2 percent this month just through July 5, meaning the fund is now down 22.6 percent year-to-date.
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Boston-based Adage Capital Management disclosed it owns 1.45 million shares of Ultratech, or 5.4 percent of the semiconductor-equipment maker. At the end of the first quarter, the hedge fund firm owned a little less than 1.2 million shares.
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HFR’s Weighted Composite index rose 0.83 percent in June, boosting the gain for the year to 1.63 percent. Macro funds led all strategies while event-driven and equity-hedge were in the red last month. HFR points out that equity-hedge is the only one of four main hedge fund strategies in its database to lose money over the first six months of the year.
