Jonathan Pollock (courtesy photo)
Jonathan Pollock is the guy you send in to save a deal.
When British-Australian mining company BHP Billiton announced in the summer of 2017 that Ken MacKenzie would become chairman, Pollock saw a chance to reset the tense relationship between his firm, Elliott Management, and the mineral and petroleum giant.
A team from Elliott, a hedge fund best known for its activist campaigns, had built up a stake in BHP and worked for months to get management to talk privately about the fund’s ideas to boost the company’s stock price, including spinning off the U.S. oil business. But management refused, unceremoniously passing Elliott off to investor relations. So the hedge fund took the route it often does: It went public with a blueprint for a wholesale restructuring of the company.
BHP’s CEO was personally offended by the fund’s criticism and complex plan, which included pushing him to buy back stock instead of making more “value-destructive” acquisitions and collapsing the company’s dual listing. The Elliott team had miscalculated how hard it would be to run a proxy fight in Australia, particularly against a company with deep government backing. Elliott had quickly turned aggressive — some say “shrill” — realizing too late that it had little sway.
Pollock, who now runs the $65 billion hedge fund side by side with founder Paul Singer, met with BHP’s new chairman multiple times, taking a more diplomatic course to try to reboot the dialogue. According to multiple sources in the U.S. and Australia with knowledge of the matter, MacKenzie agreed with the assessment of the company’s issues and much of the plan. But he insisted on putting his own imprint on it and refused to give Elliott any credit. And he made sure it didn’t look like the hedge fund had forced him into these decisions. Pollock essentially won everything Elliott wanted and locked in huge profits on the trade — though it took five years. (BHP and Elliott are once again sharing headlines. Just last week, BHP made a takeover offer for Anglo American, a mining company in which the hedge fund has a $1 billion stake.)
Pollock joined Elliott in 1989, when it had approximately 20 employees and $250 million in assets. Now it has almost 600 employees and one multistrategy fund that includes equities, private equity and private credit, distressed investments, real estate, commodities, arbitrage, and a large book of hedges to protect the portfolio.
Pollock has been the go-to guy — the levelheaded executive needed to reset relationships — whenever the firm’s deals have hit trouble. He jumped in with a calm presence and the authority to get things done during the final torturous days of the restructuring of Caesars Entertainment, when second-lien loan financiers and private equity sponsors were threatening to blow up the deal. And he intervened at the end of the hedge fund’s infamous 15-year battle with Argentina after the country defaulted on its debt. (That saga — filled with juicy details that seem ripped from a novel — ended with Elliott making $2.4 billion on the bonds it owned.) Like Harvey Keitel’s methodical Winston Wolf in Pulp Fiction, Pollock solves problems.
Of course, Elliott would just as soon have things go swimmingly. “Most of the time, it’s because we have some sort of problem, it got emotional,” Pollock says in a rare interview. “I tend not to be that emotional. I’ve only been deeply involved in a position if it’s come off the rails.” It works best when there are fewer fires, he says. He declined to comment specifically on BHP.
Pollock, 60, one of the most powerful people on Wall Street, is not well known outside the firm and beyond Elliott’s investors. In interviews for this story, it was clear that few are aware of his personal story, including struggles with dyslexia, and what he brings to the job of co-running a legendary hedge fund that hasn’t suffered a loss since the global financial crisis and has had only two down years since its founding in 1977. It doesn’t help that Pollock shuns the media. (This story is largely based on 75 background interviews with current and former employees, consultants, competitors, bankers, pensions, endowments, family offices, and other hedge fund allocators, as well as three interviews with Pollock.)
Pollock is a deeply private man overshadowed, happily, by the firm’s 79-year-old founder, who has amassed decades of headlines for his hedge fund’s consistent track record and his take-no-prisoners battles with a long list of companies that includes Alcoa/Arconic, AT&T, Caesars, Delphi, Hess, Lehman Brothers, and SoftBank — to name just a handful. Singer is also active in politics, supporting Republican politicians, a broad range of conservative causes, and issues that can’t be neatly categorized, including the push for gay marriage. The press keeps a close watch on Singer. Last year, ProPublica reported on Supreme Court Justice Samuel Alito taking a luxury fishing trip to Alaska, with his accommodations and other activities paid for by multiple benefactors. It was revealed in the story that Alito had flown to the state on Singer’s private jet.
That meant Singer and Pollock needed to transform Elliott from a loose collection of hypercompetitive investors who disdained bureaucracy — and often didn’t communicate with each other — into a firm with processes in place to get to better and more consistent answers and to more effectively tap into the expertise of its people across teams and get them to weigh in on all investment decisions. (It also meant that Singer would need to name a successor who institutions would get on board with and who they believed would stay with the firm even if Singer had no plans to retire.)
The changes, which in some ways were long overdue, also fit with the firm’s strategy, which is not necessarily to earn the highest returns among all hedge funds but to minimize risk and allow investors to sleep at night. “I’m not sure Jon would use these exact words, but I’ve used these words internally: We are in a number of losers’ games. To me, what that means in a practical way is that our results are not generated by our brilliance,” Singer says. “They’re generated by minimizing the mistakes. We have a growing number of very intelligent, well-educated people . . . so people are getting ideas, they’re thinking up things to do, but it’s the mistakes that really are, I believe, the most important part in the overall result.”
For decades, Elliott didn’t even have its own general counsel, though the firm has relied on legal strategies and scores of lawyers to pore over legal documents looking for loopholes that might unlock profits rivals missed. Singer himself has a JD from Harvard Law School. So Singer and Pollock decided to get the firm a lawyer. It wasn’t a tough sell. They had watched scores of hedge funds disappear throughout their careers, tripping over the biggest risk of all: regulations. (At the time, Elliott was facing questions from French regulators, which have a history of run-ins with activist investors.)
“Elliott had been really successful and by 2015 was becoming a very well-known fund that took highly public positions,” says Richard Zabel, who became the firm’s first general counsel that year. “What I think was happening — and Jon didn’t say it this way, but when I look back, I’m pretty sure — Elliott was just drawing more and more attention. Jon appreciated that was happening; it was a function of success. You can see that from 2015 to now, and with that came all sorts of legal issues.”
When Elliott was looking for a GC, a number of lawyers suggested Zabel, the No. 2 under Preet Bharara at the U.S. Attorney’s Office, where he helped prosecute terrorists and insider traders at hedge funds. He had previously been on the other side, co-heading Akin Gump’s white-collar criminal defense practice and representing a lot of hedge funds. Zabel, a Harvard Law alum, knew Elliott had plenty to gain by hiring someone from the government. He took the job only after he was convinced Pollock had the credibility to get people to accept an ex-prosecutor who would say things they wouldn’t necessarily like.
Patrick Frayne, a partner who joined Elliott from BlackRock in 2012 and helps oversee structured credit and macro trading, believes Pollock has earned that loyalty, in part, because “he always shoulders the blame, the accountability, whether or not it was really him or not. He always takes the blame so that everybody is always able to think clearly and not thinking about, ‘But oh, god, I messed this up.’” An allocator who has known Pollock for 20 years says, “Jon would run through a wall for his team.”
Singer adds, “You’ve got to motivate people and fix people when they’re damaged. When somebody loses a lot of money and can’t see into the horizon of repair, Jon is good at figuring out how to add to people’s resilience. Tenacity is something people come with or don’t, but resilience is something that a good boss, a good supervisor, can help.”
Elliott doesn’t think too much about how best to manage people. “You don’t make it to be a partner at Elliott without having been punched in the face, metaphorically — or for many of us, literally at some point in our life — via the markets and the things that we do or just losing an unbelievable amount of money for the fund,” Frayne says. “Every one of the partners has had that happen to them more than once over their careers.”
Singer and Pollock also brought in a chief operating officer, another Harvard Law grad, Zion Shohet, who headed the global regulatory reform and implementation group at Citigroup after the financial crisis. Like Zabel, Shohet wanted to know the firm was serious about institutionalizing. “You always wonder in the back of your head, especially when you’re joining a new spot, do they mean what they say, right? Are they going to back me when we’re going to have hard decisions to make?” Pollock assured him he would. “At every turn, that commitment has been there,” says Shohet.
Of course, Pollock has cred from surviving Elliott for decades, which he couldn’t have done without an investment edge in a place full of people with investment acumen. One source describes him as being able to anticipate the problems and hurdles of any investment: “He’s a second- and third-order thinker.”
Others note that Pollock can methodically “wade through” an almost endless stream of information about a potential or existing position and see through to the few critical questions that need to be answered or remember obscure parts of similar situations from years before that might provide insight. He draws on a “database of mistakes or successes that he’s made in investing,” says one source.
Pollock also has the patience (well, when he wants to, say several sources) to listen to the people he’s surrounded himself with and not cut them off.
“He’s not a guy who is looking at his phone, or doing anything else. He’s away from electronic devices, fully locked into whatever subject he’s on,” Frayne says. “To this day, it’s almost inevitable that I walk out of [talks with him] embarrassed that I didn’t know something. He has such an unbelievable ability — no matter what it’s in, no matter what sector or area it’s in — to just kind of ask the most pointed questions that kind of seem so obvious in retrospect.”
Pollock, whose father was an engineer and his mother a housecleaner, was an angry kid who hated schoolwork right up until his high school graduation. He had his reasons. In second grade, his teacher called his mother to tell her Pollock was being put in the class with the “slow kids” — this after denigrating his intellectual capabilities by using a term considered acceptable in the 1960s. A couple of years later, Pollock’s mother found the right specialists; they diagnosed Pollock with dyslexia, which makes reading, spelling, and learning languages a struggle.
But the diagnosis didn’t help him escape the label of “slow,” nor did it quench his anger. Public schools were ill equipped at the time to deal with dyslexia. Pollock, whose grandfather taught him to box, wasn’t afraid to get physical and frequently got into fights. He discovered hockey and channeled some of his bitterness into the sport, transferring to a private school in tenth grade where he played on the hockey team.
There was one nearby college that offered an audio books program, the state-of-the-art technology at the time for dyslexic students. In 1985, that’s where Pollock went: Curry College in Massachusetts, where he got through his classes by listening to books on tape.
Dyslexia forced Pollock to hone other skills. “Anybody who has a disability learns to compensate. My compensation was I had a great memory. You could tell me something, and I would remember everything,” he says. During the first interview with Institutional Investor, Pollock was initially grouchy and impatient, clearly considering whether he should talk to a reporter about his childhood, let alone dyslexia. But he ended up going over the allotted time, getting into the weeds of investments, quirky stories about the early days of Elliott and its people, and changes in markets that have led the firm to become increasingly dogged and refined in its methods.
After Pollock graduated from Curry, he went on to the College of William & Mary in Virginia to pursue an MBA. He worked a string of jobs, including crawling underneath houses and trailers as a cable TV installer and pestering people by phone to respond to customer satisfaction surveys, a role that elicits chuckles from those who say Pollock isn’t a customer satisfaction kind of guy. He saved money by buying dented cans of soup on sale but couldn’t get a loan for tuition and had to drop out.
After that, he looked for any job he could get, landing at EF Hutton in New York in 1986. He hated it. Pollock was a personal financial planner with zero experience in planning, and the analysis always seemed to end with the client needing to buy a product carrying a high commission. He soon moved on and joined a small investment bank. When the stock market crashed a few weeks later, in October 1987, the owner turned to the 24-year-old for ideas. His boss ended up pitching Pollock’s suggestion — covered calls — to clients.
“Our style was putting ads in the newspaper,” with applicants directed to respond to “rock and roll heroes of mine: Robert Plant, Mick Jagger, J.L. Lewis, I don’t remember,” he says. “[Pollock] had a little bit of history on Wall Street, as I did,” Singer adds, noting that he didn’t go to “an elite college. He went to Curry College. I went to the University of Rochester. Frankly, I don’t remember anything special. I vaguely remember that he seemed smart.”
Pollock replaced a woman at Elliott who had traded closed-end funds before being fired for getting the lunch order wrong. He says his first innovation was to fax the meal order to the restaurant, fending off potential challenges to his accuracy.
He worked six and a half days a week. Commuting by bus from New Jersey to Port Authority in New York, he would try to beat Singer, who arrived at 7:30, to the office. Singer would tape scores of notes, written on bits of yellow legal paper, to everyone’s chairs — especially on Monday mornings. There were two categories of notes: one for positions the firms owned, the other for those they should. Pollock would read Barron’s on Saturday to predict what sort of trouble he would be in on Monday. But things were starting to click for him, and he buried himself in the work.
One of the few activists in closed-end funds, Elliott made money by pushing them to narrow the discount between the value of the underlying assets and the share price. Pollock had to come up with a hedge to replicate the movement in net asset value, so the firm was exposed only to the discount. If it widened, he lost money; if it tightened, he made money. Pollock couldn’t believe how much the firm was making simply by being first to a strategy. In many ways, closed-end funds had all the building blocks of what Elliott has done in the years since.
Pollock was also the junior analyst to four portfolio managers and got thrown into the world of bankruptcy — the big asbestos cases, RJR Nabisco, Drexel — replete with chaos and conflict. At the time, whoever best understood the code and owned the right class of securities could drive the outcome.
“In those days, you could catch a train and go to Delaware and sit in a courtroom and actually have an informational advantage over everybody else who was sitting in New York,” Pollock recalls. “Being in the hallways, picking up stuff, it was crazy. I loved it.”
His career took off in 2003 after Singer sent him to the London office, where the closed-end market was wide open. Singer watched closely as Pollock built the office up from three people (and Pollock’s dog) into a successful 100-person operation. Elliott had the market almost to itself for years.
In 2009, Singer asked Pollock to come back to the U.S. to take over equity, credit, and real estate. The firm had just suffered its second-biggest loss, ending 2008 down about 3.5 percent after a midyear double-digit gain was wiped out.
Nothing needed to be fixed. A 3.5 percent loss was an all-out win in a year when hedge funds in aggregate failed to make good on their promise of protecting investors in a down market. Investors were flooding Elliott with money — it brought in nearly $1 billion in the fourth quarter alone — and Singer wanted Pollock to help the firm put money to work in one of the best investing environments in decades.
On Pollock’s first day back, the Obama administration told Elliott, which held bonds in Chrysler, that the president would “name and shame” the firm if it didn’t get on board with the government’s restructuring of the automaker. Pollock laughs, pointing out that it was April 1. But the firm decided not to fight this one.
As other hedge funds left the business after making mistakes in the financial crisis, Elliott not only held on to its positions but, with plenty of cash from investors, added more, ending 2009 with double-digit returns.
By 2012, Pollock had become co-CIO. Three years later, he was named co-CEO.
Pollock and Singer were watching as many of Elliott’s campaigns ended up with the companies being sold to private equity firms, which then made far more money on turnarounds than Elliott had with its activism. The firm was doing the work of identifying companies with fixable problems, buying large stakes in them, telling boards they didn’t belong in the public markets and that PE could turn them around. (In fact, many PE firms waited for Elliott to rattle these companies and then moved in.) Pollock and Singer knew that few, if any, other firms had both a private equity business and public markets experience. In 2017, Elliott made its mark when it took Gigamon private in a $1.6 billion transaction, followed by Athenahealth, a deal in which it made five times its money. Other deals included the acquisition of Barnes & Noble in 2019.
In 2020, Pollock pushed for one of Elliot's biggest changes, establishing a firmwide investment committee for the first time and reorganizing around business lines rather than geographies. Having a formal group that reviews investments is hardly radical in the industry. But because many hedge funds have sprung from the minds and tenacity of one or two people, that structure often remains even after decades of growth, thinning the bench and frustrating talented people who crave bigger roles.
“Previous to putting the IC together, it was Paul and I kind of playing both goaltender and offense,” Pollock explains. “And it’s really hard, because the goal is open not just on one side — it’s open on all different sides. So having two people in a book this big, whose primary responsibility was to keep bad things from happening, was really hard.”
Of course, Pollock and Singer are on the investment committee questioning everything, but, as Pollock says, “When you think about it, we weren’t really drawing on one of the key strengths in the firm, which is the fact that we’ve got a senior layer of people [who] have been here for decades,” including, among others, Jesse Cohn, a managing partner who focuses on activism in tech names as well as private equity; Steve Cohen (Elliott’s Steve Cohen), who is in charge of global risk and trading and runs the macro book with Frayne; Dave Miller, the well-known distressed trader, who heads U.S. restructuring; Gordon Singer, Paul’s son, who is a managing partner helping to oversee the global situational investing business and has been head of the London office since Pollock returned to the U.S., and John Pike, the partner who oversees energy and mining companies (he did the Hess trade in 2013 and the Phillips 66 deal in late 2023).
When asked why Pollock and Singer’s relationship works, many sources first wanted to compare and contrast the two men. Pollock is quieter and will stand back from a debate to hear the entire story before asking detailed questions. He knows everything about every individual trade. Singer is engaging, peppering people with questions throughout a discussion until he understands everything. He’s more involved in macro and asset allocation.
The two share a fearlessness.
“When we act, it’s usually very public, it’s usually very big,” says Frayne. “We can’t get out of our mistakes, so there’s a tremendous confidence that has to come from some of the things we do. They both exhibit that. When they believe we’re right, they have the ability to make big bets, even if the market doesn’t necessarily agree with us all the time and might be going against us.”
Other sources point to the bottom line: Singer has sufficiently shared the economics of the business and provided a career path for senior people — not just Pollock. (Elliott has 14 equity partners.) When succession doesn’t work, it’s often because founders have been unwilling to dilute their equity enough to satisfy the next generation. Sure, these people are rich, but everything is relative on Wall Street. Elliott also has a structural advantage in its long-duration fund: It doesn’t have to worry about liquidity (at least relative to many other funds), can wait out market events, and is able to attract top people.
Turning a hedge fund built in a market and an investing culture that no longer exist into an organization with all the institutional trappings runs the clear risk of quashing the hunger and creativity that made it successful in the first place.
“Institutionalization, it’s such a dirty word, especially in an entrepreneurial business like a hedge fund. But that’s what an institution is: It’s supposed to be a consistent way of doing work and delivering consistently positive outcomes,” notes Pollock.
All businesses grow up, he adds.
“One of the ways to determine whether it’s working is that I haven’t been called into a situation for some time now. It’s not a good day for me when I’m sitting across from a CEO, because something has gone awry.”
