Greenlight Capital
IndustryInvestment management
Founded1996
FounderDavid Einhorn
Jeffrey A. Keswin
HeadquartersNew York City, U.S.
ProductsHedge fund
AUMDecrease US$1.6 billion
(as of March 30, 2020)[1]
Number of employees
25
Websitewww.greenlightcapital.com
Greenlight Capital Re, Ltd.
Nasdaq: GLRE (Class A)
Russell 2000 Component
IndustryReinsurance
Founded2004
FounderGreenlight Capital
HeadquartersDublin, Ireland and Cayman Islands
Websitegreenlightre.com

Greenlight Capital is a hedge fund founded in 1996 by David Einhorn. Greenlight invests primarily in publicly traded North American corporate debt offerings and equities.[2] Greenlight is most notable for its short selling of Lehman stock prior to Lehman Brothers' collapse in 2008[3] and the $11 million fine they received in January 2012 for insider trading in the UK.[4] Einhorn remains the fund's manager.

Overview

Founded in 1996 by Einhorn,[5] with $900,000 (half borrowed from Einhorn's parents), Greenlight had generated greater than a twenty-five percent annualized net return for its investors, but recent lackluster results have brought this to under fifteen percent [3] It prospered in its early days by identifying weak financial firms for short selling, making significant gains from Conseco, CompuCredit, Sirrom Capital, and Resource America.[3] It also manages a fund of funds and a private equity fund through its affiliates, Greenlight Masters and Greenlight Private Equity Partners. It also operates Greenlight Capital Re, a property/casualty reinsurer.[2] Unlike other funds, Greenlight does not use borrowed money, or leverage. The firm does not generate large trading volumes.[3] In June 2008 there were 25 employees, including nine analysts and one trader. It occupies a single high floor of an office building near Grand Central, in New York City.[3]

History

A few months before the dot-com bust, Greenlight lost 4% of its total capital on a short on Chemdex stock as it soared in price. A few months after Greenlight closed its position, Chemdex stock plunged to $2.[3]

In the third quarter of 2008, Greenlight lost 15% of its value,[6] primarily from long positions on industrial companies like Helix Energy Solutions,[6][7] when the SEC temporarily banned short selling of financial stocks.[8] With the majority of Greenlight's money in bonds and long positions on stocks, this stopped hedge funds minimizing 'long' losses or offsetting them with short gains.[9] Greenlight ended 2008 down 23%, its first annual loss.[10] In 2009 Greenlight recouped its losses from 2008.[11]

Einhorn and Greenlight Capital were fined by the FSA for insider trading in January 2012.[12]

Greenlight Capital was down 20 percent for 2015.[13]

In February 2015, Greenlight Capital was ranked 53rd out of 58 hedge funds, with a D grade, in the Institutional Investor's Alpha Hedge Fund Report Card. This was the second year in a row Greenlight Capital received a D from IIA.[14]

Greenlight Capital greatly underperformed the bull market in 2017. For January 2018, Greenlights funds were down 6% for the month where the S&P 500 was up 5.6%.[15][16]

In March 2020 the fund posted loss of 21.5% as the global coronavirus pandemic drove the stock markets down.[17]

Top equity holdings

As of 2019, the top equity holdings of the firm were in the shares of the following companies: Green Brick Partners, Brighthouse Financial, Ensco, General Motors, Exela Technologies, CONSOL Coal Resources, and Altus USA.[18]

Greenlight Capital lowered its stake in Apple by 6.2 percent to 8.6 million shares during the fourth quarter of 2014, despite Apple shares being up 15 percent in the year.[19]

Philanthropy

In 2009, Greenlight Capital donated $7.2 million to three charities: Tomorrows Children's Fund, the Center for Public Integrity (CPI) and the Project on Government Oversight (POGO). The Tomorrows Children's Fund received $2.6 million, CPI received $1.8 million, and POGO received $1.8 million.[20]

Political contributions

In 2012, Greenlight Capital ranked 5th out of WNYC's top 10 hedge fund political donors. The hedge fund contributed $592,729.88 to New York State political campaigns in 2012.[21]

References

  1. ↑ "Greenlight Capital Inc - Assets, Funds, Holdings". No. Greenlight Capital. United States: AUM13F. AUM13F. 30 March 2020. Retrieved 5 September 2020.
  2. 1 2 "Green Light Capital, Inc. Company Information". Hoover's. Retrieved October 5, 2014.
  3. 1 2 3 4 5 6 Hugo Lindgren (June 15, 2008). "The Confidence Man". New York.
  4. ↑ Werdigier, Julia (25 Jan 2012). "Greenlight Capital to Pay $11 Million Fine in Insider Case". nytimes. Retrieved 23 July 2015.
  5. ↑ "Company Overview of GreenLight Capital, Inc". Businessweek. Archived from the original on June 8, 2008. Retrieved 3 June 2013.
  6. 1 2 "Hedge Funds Concede Errors, Profess Optimism After Worst Losses". Bloomberg. 14 October 2008.
  7. ↑ Avi Slazman (September 17, 2008). "David Einhorn Bulks Up on Helix Energy". Barron's.
  8. ↑ "SEC Halts Short Selling of Financial Stocks to Protect Investors and Markets". SEC.gov. September 19, 2008.
  9. ↑ Boyd, Roddy (3 October 2008). "Market chaos batters hedge-fund star". CNN. Retrieved 4 May 2010.
  10. ↑ "Greenlight Hedge Fund Lost 23% in 2008 on Helix, VW (Update1)". Bloomberg. 23 January 2009.
  11. ↑ Opalesque (30 October 2009). "Greenlight recoups losses from 2008".
  12. ↑ "Einhorn, Greenlight fined for market abuse". Reuters. 25 January 2012.
  13. ↑ Hussain, Tabinda (31 December 2015). "Einhorn's Greelight Fund Ends Second-Worst Year Down 20%url=https://www.bloomberg.com/news/articles/2016-01-01/einhorn-s-greenlight-hedge-fund-ends-second-worst-year-down-20-/". Bloomberg.
  14. ↑ Celarier, Michelle (19 February 2015). "David Einhorn's Greenlight Capital just makes 'D' grade". New York Post. Retrieved 10 April 2015.
  15. ↑ Chung, Juliet (February 2018). "David Einhorn's Greenlight Capital Lost 6% in January". Wall Street Journal.
  16. ↑ David Einhorn's hedge fund is getting crushed because of ill-timed bets against Amazon, Tesla during market surge
  17. ↑ "Hedge fund Glenview off 30% as coronavirus weighs on portfolio". Reuters. 3 April 2020. Retrieved 27 April 2020.
  18. ↑ "Greenlight Capital - Latest 13F Holdings". Retrieved March 24, 2019.
  19. ↑ Ablan, Jennifer. "Greenlight Capital scales back on Apple shares ahead of rally". No. 13 February 2015. Yahoo Finance. Retrieved 10 April 2015.
  20. ↑ "Greenlight's Einhorn says shorting Moody's". Reuters. 28 May 2009. Retrieved 27 April 2020.
  21. ↑ Alcorn, Stan (18 April 2012). "Who's Who in Hedge Funds: NY's Top 10 Political Donors". wnyc. Retrieved 23 July 2015.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.