Jeffrey A. Keswin
|Headquarters||New York City, U.S.|
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.
Greenlight Capital was down 20 percent for 2015.
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.
Top equity holdings
As of 2015, 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., Virgin Media, and Market Vectors.
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.
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.
Greenlight Capital made a total of $29,300 in political contributions in the 2014 election cycle. Individuals within Greenlight Capital donated $9,900 to the Democratic Party of Virginia, $5,200 to Alan Grayson, $5,200 to Common Sense Colorado, $5,000 to Off the Sidelines, and $5,000 to Michael Bennet.
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.
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- "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.
- Hussain, Tabinda (31 December 2015). "Einhorn's Greelight Fund Ends Second-Worst Year Down 20%url=http://www.bloomberg.com/news/articles/2016-01-01/einhorn-s-greenlight-hedge-fund-ends-second-worst-year-down-20-/". Bloomberg.
- Celarier, Michelle (19 February 2015). "David Einhorn's Greenlight Capital just makes 'D' grade". New York Post. Retrieved 10 April 2015.
- Greenlight Capital — Investor Profile
- Alcorn, Stan (18 April 2012). "Who's Who in Hedge Funds: NY's Top 10 Political Donors". wnyc. Retrieved 23 July 2015.
- "Greenlight Capital: Summary". Open Secrets. Retrieved 14 April 2015.
- "Greenlight Capital Donates $7 Million to Charity at Ira Sohn Research Conference" (PDF). Fooling Some People. Retrieved 14 April 2015.