Jeffrey A. Keswin
|Headquarters||New York City, U.S.|
Greenlight Capital is a hedge fund founded 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.
Founded in 1996 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. 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.
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.
Top equity holdings
As of 2013, the top equity holdings of the firm were in the shares of the following companies: Apple Inc, General Motors, Marvell Technology Group, CIGNA, Aetna, Computer Sciences, Delphi Automotive, NCR Corp., and Virgin Media.
- Greenlight Capital - Investor Profile
- "Green Light Capital, Inc. Company Information". Hoover's. Retrieved October 5, 2014.
- Hugo Lindgren (June 15, 2008). "The Confidence Man". New York (magazine).
- "Company Overview of GreenLight Capital, Inc.". Businessweek. Retrieved 3 June 2013.
- "Hedge Funds Concede Errors, Profess Optimism After Worst Losses". Bloomberg. 14 October 2008.
- Avi Slazman (September 17, 2008). "David Einhorn Bulks Up on Helix Energy". Barron's (newspaper).
- "SEC Halts Short Selling of Financial Stocks to Protect Investors and Markets". SEC.gov. September 19, 2008.
- Boyd, Roddy (3 October 2008). "Market chaos batters hedge-fund star". CNN. Retrieved 4 May 2010.
- "Greenlight Hedge Fund Lost 23% in 2008 on Helix, VW (Update1)". Bloomberg. 23 January 2009.
- Opalesque (30 October 2009). "Greenlight recoups losses from 2008".
- "Einhorn, Greenlight fined for market abuse". Reuters. 25 January 2012.
- Greenlight Capital — Investor Profile