Elliott seeks to reassure investors as long-term returns fall behind S&P 500 - Financial Times

Elliott Management is undertaking a reassurance campaign with its investor base following disclosure that the fund's long-term returns have lagged the S&P 500, according to reporting from the Financial Times. The performance gap has become increasingly visible as Elliott's 2025 year-to-date results—a net gain of 4.7% after fees through the first nine months—trail broader equity market performance substantially.

The performance challenge extends beyond 2025. Over a five-year period, Elliott's annualized returns reached 9.21% net of fees, compared to the S&P 500's 16.30% annualized gain. This divergence is particularly significant given the magnitude of assets under management at Elliott, one of the world's largest hedge funds. The fund has also generated single-digit net returns in six of the last nine years, yet maintained fee structures typically associated with higher-performing strategies.

Founder Paul Singer has positioned Elliott's underperformance as a deliberate strategic choice, arguing that the fund prioritizes steady, risk-adjusted returns over absolute performance maximization. Singer has consistently emphasized that Elliott's focus differs from more aggressive hedge fund approaches, suggesting that conservative positioning and rigorous hedging practices justify the fund's premium fee model. This messaging appears designed to retain institutional capital by reframing underperformance as a consequence of disciplined risk management rather than operational underperformance.

The reassurance effort underscores a broader challenge facing large hedge funds in an environment where passive equity exposure continues to outpace active management returns. For pension funds and family offices evaluating Elliott's fees against its long-term track record, the case for continued allocation increasingly depends on acceptance of Singer's risk-management narrative rather than alpha generation.