US activist hedge fund firm Elliott Investment Management has built an £850m short position against Shell, marking the largest disclosed wager against the FTSE 100 oil giant in nearly a decade, according to a report by The Times.
The report cites regulatory filings with the UK’s Financial Conduct Authority (FCA) as revealing that Elliott’s 0.5% short position in Shell is the biggest since 2016, when hedge fund Davidson Kempner targeted the company.
The move comes as Elliott has amassed a near 5% stake in BP, valued at more than £3.5bn, where it is pressuring the company to cut costs and shift strategy. The hedge fund’s short position in Shell, alongside disclosed shorts in TotalEnergies and Repsol, is believed to be part of a broader hedging strategy to mitigate risks tied to its BP investment.
By shorting other major energy stocks, Elliott is protecting itself against sector-wide declines that could impact its BP position.
Elliott’s short disclosure coincided with Shell CEO Wael Sawan’s unveiling of a new cost-cutting and spending strategy aimed at closing the valuation gap between Shell and its US counterparts, Chevron and ExxonMobil.
At the same time, BP CEO Murray Auchincloss is under growing investor pressure to enhance performance and narrow BP’s valuation discount to its US rivals. Last month, Auchincloss abandoned BP’s previous green energy shift, opting to increase oil and gas production – a shift that came just weeks after Elliott’s stake in BP was disclosed.
Founded by Paul Singer in 1977, Florida-based Elliott Investment Management manages nearly $73bn in assets. Known for taking stakes in underperforming companies and pushing for strategic overhauls, Elliott has a history of leveraging the courts and shareholder activism to drive change.
The firm, which operates a major London office led by Gordon Singer, gained notoriety for its 15-year legal battle with Argentina over a debt default, eventually securing a $2.4bn settlement.
Elliott declined to comment on its position.
