Morning Brief: Elliott Scores Big With Advisory Board Deal

Elliott Management has seen a more than 50 percent gain from the stake it built in the company from November to early January.

Score this a victory for Paul Singer’s Elliott Management. The Advisory Board, a health-care consulting firm, said Tuesday that it has agreed to sellits health-care business to UnitedHealth Group’s Optum unit and its education business to Vista Equity Partners. The total value of the deals is about $2.58 billion. Advisory Board shareholders will receive $54.29 per share in cash after the deals close. Elliott built an 8.3 percent stake in the company between November and early January for prices ranging from $32.71 to $36 a share. This works out to a more-than 50 percent gain for Elliott in less than a year. The Advisory Board reached a settlement with Elliott in February, when it agreed to do a strategic review.


Viking Global Investors led a private placement of $45.8 million in stock of aTyr Pharma, a biotherapeutics company engaged in the development of products to treat patients suffering from severe, rare immune-mediated diseases, as well as various cancers. Investors are buying more than 5.87 million shares at $2.65 each, with Viking also agreeing to purchase almost 2.3 million shares of non-voting class X preferred stock at $13.25 each, according to a statement this week from aTyr Pharma. Each of the class X shares is convertible into five shares of common stock. The company expects to use the proceeds primarily to advance its pipeline of therapeutic candidate programs. aTyr Pharma went public in May 2015 at $14 per share. The stock closed Tuesday at just $2.80, up 1.8 percent.


Total capital invested in emerging markets hedge funds increased to $213.3 billion at the end of the second quarter, the fourth straight quarterly record, according to HFR. Perhaps more significantly, investors allocated new capital to emerging markets hedge funds for the first time since the second quarter of 2015, as EM funds saw $800 million in net new inflows. Through July, the HFRI Emerging Markets (Total) Index is up 12.6 percent. Hedge funds investing in India and China led the way, gaining 25.5 percent and 19.3 percent, respectively, through July. Hedge funds investing in the Middle East are up 9.6 percent for the year. “Inflows returned to EM hedge funds after eight quarters of outflows as investor risk tolerance increased, driven by outstanding performance and regional equity market outperformance concentrated in emerging Asia,” Kenneth Heinz, president of HFR, said in a statement Tuesday.