Recently, hedge fund Elliott Management, the largest activist shareholder fund in the world with assets under management in excess of $41 billion, has targeted another utility to work its “magic” – Duke Energy (DUK). Elliott is known to target companies which they identify as being undervalued, and proposes actions to improve performance and, in turn their shareholdings. CNBC refers to Elliott CEO Paul Singer as the world’s most feared investor and former athenahealth CEO Jonathan Bush, whose company was targeted by Elliott in 2017, described doing research on Elliott as “googling this thing on your arm and it says, ‘You’re going to die’” just before Elliott took the company private in 2018. Utility sector investors should sit up and take notice as the proposal reveals a very interesting approach to utility investing – an emphasis on location and de-consolidation.
