Greenlight Capital
 |
|
| Industry | Investment management |
|---|---|
| Founded | 1996 |
| Founder |
David Einhorn Jeffrey A. Keswin |
| Headquarters | New York City, U.S. |
| Products | Hedge fund |
| AUM | $10 billion |
| Website | www |
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. Greenlight is most notable for its short selling of Lehman stock prior to Lehman Brothers' collapse in 2008 and the $11 million fine they received in January 2012 for insider trading in the UK. Einhorn remains the fund's manager.
Founded in 1996 by Einhorn, with $900,000 (half borrowed from Einhorn's parents), Greenlight has generated greater than a twenty-five percent annualized net return for its investors. 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. A highly diversified multi-strategy fund, 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. Unlike other funds, Greenlight does not use borrowed money, or leverage. The firm does not generate large trading volumes. In June 2008 there were 25 employees, including 9 analysts and 1 trader. It occupies a single high floor of an office building near Grand Central, in New York City.
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.
In the third quarter of 2008, Greenlight lost 15% of its value, primarily from long positions on industrial companies like Helix Energy Solutions, when the SEC temporarily banned short selling of financial stocks. 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. Greenlight ended 2008 down 23%, its first annual loss. In 2009 Greenlight recouped its losses from 2008.
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Wikipedia