David Einhorn’s Greenlight Capital Plans to Take in New Client Money
(Bloomberg) -- David Einhorn’s Greenlight Capital had $1.7 billion in clients withdrawals last year as the hedge fund posted its biggest annual loss in its history.
It was a remarkable plummet for Einhorn, who started this year with $2.5 billion, down from more than $6 billion a year ago, according to a person familiar with the firm. The fund’s 34 percent loss from a variety of bad bets accounts for the rest of the asset drop.
Einhorn, who ran $12 billion at his peak, hadn’t taken in new capital from investors since 2014. Now, with assets down about 60 percent in a year, there’s no reason not to open to new investments.
"We no longer believe there is risk of our assets growing too quickly (other than through improved performance)," Einhorn wrote in a quarterly letter to investors, explaining why he would re-open to new capital. "To be clear, we do not plan to initiate a marketing effort, as we plan to continue to focus on the portfolio," he added.
Greenlight started this year with strong performance, up about 11 percent, the person said. Brighthouse Financial Inc., among its biggest U.S. stock holdings, has climbed 17 percent and General Motors Co. has jumped 13 percent. The benchmark S&P 500 Index has rose about 5 percent.
Einhorn posted some of the industry’s best returns in its early years, but has stumbled since losing more than 20 percent in 2015. Even with this month’s jump, the firm would need to gain 54 percent to get back to its high-water mark.
A representative for Greenlight Capital declined to comment. Reuters earlier reported the returns and that the firm was opening to new capital.
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