@ElliottManagement Corp's deal to acquire #Dellsoftware assets shows how the U.S. hedge fund and prominent activist investor is stepping up its private equity practice, and positioning itself for more takeovers in the tech sector.
The more than $2 billion purchase, done with buyout firm Francisco Partners, is an offshoot of Elliott's campaign against storage company #EMC Corp (EMC.N), which agreed to be bought by Dell Inc last year for $67 billion. Dell shed the software assets because it deemed them non-core following the deal with EMC.
Unlike its previous offers to companies, where Elliott threatened to buy a business it was agitating against, this time the attempted leveraged buyout was not a target of Elliott. Elliott clinched the Dell software deal through Evergreen Coast Capital, a new tech-focused private equity wing housed inside the $28 billion hedge fund.
"The lines between activism and private equity have been blurring for a while now," said Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management, referring to Evergreen. "This is a high profile and poignant demonstration of this."
Elliott is now the only major activist hedge fund boasting an in-house private equity team, ready to buy control of companies, streamline them, and sell them later for a premium. Activists, by contrast, mostly purchase minority stakes and push for major changes at a company, including putting it up for sale, often with a shorter time frame than a private equity investor.
http://mobile.reuters.com/article/idUSKCN0Z62O2
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