Greenlight Capital founder David EInhorn became one of the most renowned hedge fund managers in the world during the financial crisis, when he famously shorted the stock of Lehman Brothers less than year before it went bankrupt. But post-crisis is another story. His shorts have bombed, investors are fleeing, and losses are mounting.
This year Greenlight lost almost 15 percent through April, while the S&P 500 was down a mere 0.5 percent — the latest embarrassment for a former star who has not bested the stock market since 2009. Even before this year’s debacle, in 2017 alone investors had already yanked more than a third of Greenlight’s redeemable capital, a stunning loss of investor confidence that has never before been publicized. From a peak of $11.8 billion in 2014, Greenlight’s assets had shrunk to $6.4 billion by the end of 2017.
Given this year’s losses, Greenlight is now a mere $5.6 billion.
What in the world happened to David Einhorn? My Institutional Investor profile has the answers.
After this story ran, I learned of troubles at Einhorn’s reinsurance unit, Greenlight Re, which is a permanent capital and tax avoidance vehicle. Turns out, it’s more than 40 percent of Greenlight’s single hedge fund strategy. Here’s my Institutional Investor news story.