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Paul Singer: There is more to him than his critics would like to believe (illustration by Michael Daley)

Billionaire New York hedge funder, massive donor to US conservative causes and candidates, and fervent supporter of Israel — these are all qualities which make Paul Singer an almost perfect target for the Left's animus. If this were not enough, his fund has bought up Argentine sovereign debt and, while the major banks have agreed to let the country off around 70 per cent of what is owed to them, he is demanding payment in full, plus interest. What is more, Singer is a repeat offender in the "vulture" game — he has previously bought up Peruvian and Congo-Brazzaville debt and used the courts to enforce payment. Third World governments are being forced, or so the argument goes, to spend their scarce resources on paying off foreign financiers rather than seeing to the basic needs of their people — an image can easily be conjured up of a plutocrat stealing food from the mouths of starving children. 

Yet the Guardian has said of him, "Paul Singer is not your average Wall Street hedge fund manager." To its astonishment, Singer is an ardent supporter of same-sex marriage and has spent millions promoting this cause and supporting Republican candidates who share his view.

Singer, now aged 70, set up Elliott Management in 1977 with $1 million of capital; today Institutional Investor ranks it as the world's 16th-largest hedge fund with roughly $23 billion under management. Elliott has consistently outperformed the markets, generating a 14.6 per cent annual net compound return since its inception; Singer has in the process created a personal fortune of $1.9 billion, according to Forbes.

A major part of Elliott Management's strategy has been the buying up of heavily discounted distressed debt — usually corporate, not sovereign — and seeking its repayment, if necessary in the courts. Elliott Management bought up Argentine debt at the time of the country's default in 2002. The debt has since been subject to a restructuring, in other words a waiving of 70 per cent or so of its value, to which 93 per cent of debt holders have signed up. Elliot and the other "holdouts" argue that since they are not party to the agreement they should not be subject to it and have thus pursued legal remedies.

It is Singer's argument that debt forgiveness does not actually help countries who can afford to pay their debts. Doing so harms their populations by "making investing in their countries more risky and more problematic and by discouraging foreign investment". The immiseration of the people of Congo-Brazzaville, Peru and Argentina is not caused by the tactics used by Singer and his ilk but by their governments' lack of concern for their own people's welfare, by incompetence and, worst of all, by corruption.

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October 7th, 2014
11:10 AM
I don't see how someone whose principal political cause appears to be same sex marriage qualifies as "underrated" by Standpoint's standards. . .

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