Meet Paul Singer: The billionaire activist investor taking on BHP Billiton

Mining giant BHP Billiton ought to be a tad spooked if not feeling the weight of the world on its shoulders. Not only is the iron ore price nose diving, Elliott Advisors, which holds 4.1% of the mining company, is calling on it to restructure and get its house order.

You might think an activist investor calling for change at a legacy mining company is nothing out of the ordinary, but think again. The man fronting Elliott is Paul Singer, one of the highest earning hedge fund manager on Wall Street with a personal fortune of $2.6bn (£2.03bn).

On paper, it is Elliott Advisors, the UK subsidiary of Elliott Management Corporation founded by Singer, that is calling on BHP Billiton to demerge its US oil business and return money to shareholders.

Outlining a three-step plan, it says the first step should entail unifying BHP's dual-listed company structure into a single Australian-headquartered and Australian tax resident listed company

"Second step should include demerging and separately listing BHP's US petroleum business on the New York Stock Exchange," and finally the third step would include adopting 'a consistent and value-optimised capital return policy'; an opportunity to monetise the substantial franking credit balance through discounted off-market buybacks.

While BHP Billiton rebuffed the demands, saying "costs and associated risks of Elliott's proposal would significantly outweigh any potential benefits," it'd better watch out. Singer has pedigree of investor activism and never shirks away from a fight.

Don't cry for me Argentina

In full glare of the world's media, Singer's firm toughed it out with the government of Argentina for 15 long years over outstanding bond payments, eventually settling in 2016 and earning a $2.4bn profit.

Over that time, he forced then Argentine President Cristina Fernández de Kirchner to avoid flying her presidential jet for fears it might be impounded. He also gave permission for one of the country's naval ships to be seized while docked in Ghana.

However, the Argentines weren't the only ones left sweating by Singer. A recent high profile tussle with aluminium parts maker Arconic, has resulted in the company's chief executive Klaus Kleinfeld being ousted from office in April, in the face of unrelenting pressure from Elliot.

Of course, Samsung can offer some advice to BHP Billiton when it comes to batting off a Singer outfit demanding corporate overhaul, with the technology giant having faced the same not all that long ago.

In nearly a dozen missives in recent years, Singer has repeatedly pushed for the hostile takeover of Dulux paint owner AkzoNobel, sought damages from supermarket giant Tesco in the wake of its accounting scandal, and intervened in the running of National Express.

Spectacular returns and the odd loss or two

An obsessive focus on returns saw Elliot give back its clients 13% in 2016 after commissions and fees, with $31bn currently in assets under management, according to Forbes. For Singer, who founded Elliott Management in 1977 with $1.3m, it has been a spectacular rise.

The fund has not made a loss since 2008 and its last loss-making year before that came in 1998; the only two instances it has lost money since inception. Secret of Elliot's success stems from Singer's diverse range of investment strategies stretching from buying distressed debt, as Argentina found out, to intervening during mergers and acquisitions, as Azko Nobel is coming to terms with.

While many label Singer's outfit a vulture fund, the man himself calls it an exercise in acquiring undervalued stock, demanding leadership changes, spin-offs, or share buybacks, which boost share values for existing shareholders. Everyone wins, especially Singer.

Unlike some of his peers, Singer is more than happy to attach his name to political causes and chide US presidents. It can be safely assumed, most of his causes are conservative in nature.

For instance, his backing of the pro-Israel lobby stateside or pouring millions into the failed presidential bids of Republican candidates Mitt Romney, Marco Rubio and Rudy Giuliani. Yet, such support comes in tandem with his backing of LGBT rights and philanthropy.

He opposed "draconian" financial regulation introduced under former President Barack Obama, but also criticised incumbent President Donald Trump's "anti-trade" policy stances during the 2016 election campaign, claiming they would trigger a global depression.

Famously, when asked whom he would vote for in the presidential election – Hillary Clinton or Trump – Singer quipped he'd rather vote for himself. While a future bid for the White House cannot be ruled out, it is safe to say BHP Billiton, and many others would feel Singer's hot breath of activism for some time yet.