Greenlight Capital is an American 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.
 | |
| Company type | Private company |
|---|---|
| Industry | Investment management |
| Founded | 1996 |
| Founder | David Einhorn Jeffrey A. Keswin |
| Headquarters | , |
Key people | David Einhorn |
| Products | Hedge fund |
| AUM |  US$1.6 billion(as of March 30, 2020)[1] |
Number of employees | 25 |
| Subsidiaries |
|
| Website | www |
| Company type | Subsidiary |
|---|---|
| Nasdaq: GLRE (Class A) Russell 2000 Component | |
| Industry | Reinsurance |
| Founded | 2004 |
| Founder | Greenlight Capital |
| Headquarters | Dublin, Ireland and Cayman Islands |
| Website | greenlightre |
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] It also manages a fund of funds and a private equity fund through its affiliates, Greenlight Masters and Greenlight Private Equity Partners.
As of 2008[update], 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
editFoundation and early years
editFounded in 1996 by Einhorn, with $900,000 (half borrowed from Einhorn's parents).[5] Greenlight generated greater than a twenty-five percent annualized net return for its investors until 2007, but lackluster results later 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]
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]
2007–2008 financial crisis
editIn 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]
2015–2020 underperformance
editGreenlight 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
editAs 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
editIn 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
editIn 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]
Lawsuit with an ex-employee
editIn May 2024, a former employee at Greenlight Capital, James Fishback sued the hedge fund for defamation in a row over his job title.[22] James Fishback claimed he worked as “head of macro” at the New York hedge fund, but Greenlight Capital claimed that position never existed.[22] The controversy was covered in various news outlets.[22][23]
Fishback said that in the two-and-a-half years he worked at Greenlight Capital, he was promoted twice; first from research analyst to trader and then to head of macro, having generated a total $100 million in profits for the New York fund during his tenure.[24] Morever, Greenlight Capital said it did have its "best year" in its macro portfolio in 2022, during Fishback’s tenure.[25]
On June 25, 2024 Greenlight Capital filed a suit in New York Court that the ongoing case with James Fishback over his job title is hurting its business.[26] Greenlight called on the New York court to place a “permanent injunction” on the ex-staffer; Fishback, to block him from referring to himself as its former “head of macro.”[26] Fishback described Greenlight Capital’s lawsuit as a desperate ploy by the hedge fund to save face.[26]
On August 22, 2024 the Foundation of Individual Rights and Education found that the University of Florida violated the First Amendment when Greenlight Capital demanded it to take action against a school club that had advertised James Fishback as the “Head of Macro”.[27]
References
edit- ^ "Greenlight Capital Inc - Assets, Funds, Holdings". No. Greenlight Capital. United States: AUM13F. AUM13F. 30 March 2020. Retrieved 5 September 2020.
- ^ a b "Green Light Capital, Inc. Company Information". Hoover's. Retrieved October 5, 2014.
- ^ a b c d e f Hugo Lindgren (June 15, 2008). "The Confidence Man". New York.
- ^ Werdigier, Julia (25 Jan 2012). "Greenlight Capital to Pay $11 Million Fine in Insider Case". nytimes. Retrieved 23 July 2015.
- ^ "Company Overview of GreenLight Capital, Inc". Businessweek. Archived from the original on June 8, 2008. Retrieved 3 June 2013.
- ^ a b "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.
- ^ "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. Archived from the original on June 4, 2016.
- ^ 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.
- ^ Celarier, Michelle (19 February 2015). "David Einhorn's Greenlight Capital just makes 'D' grade". New York Post. Retrieved 10 April 2015.
- ^ Chung, Juliet (February 2018). "David Einhorn's Greenlight Capital Lost 6% in January". Wall Street Journal.
- ^ David Einhorn's hedge fund is getting crushed because of ill-timed bets against Amazon, Tesla during market surge
- ^ "Hedge fund Glenview off 30% as coronavirus weighs on portfolio". Reuters. 3 April 2020. Retrieved 27 April 2020.
- ^ "Greenlight Capital - Latest 13F Holdings". Retrieved March 24, 2019.
- ^ "Greenlight's Einhorn says shorting Moody's". Reuters. 28 May 2009. Retrieved 27 April 2020.
- ^ Alcorn, Stan (18 April 2012). "Who's Who in Hedge Funds: NY's Top 10 Political Donors". wnyc. Retrieved 23 July 2015.
- ^ a b c Louis Goss,"SGreenlight Capital's clash with an ex-employee has captivated the hedge-fund world". fnlondon.com. Retrieved 22 May 2024.
- ^ Bradley Saacks,"David Einhorn was once the young thorn in the side of executives. Now he's dealing with his own". businessinsider.com. 17 May 2024. Retrieved 21 May 2024.
- ^ Louis Goss,"Greenlight Capital's clash with a former employee has captivated the hedge-fund world". marketwatch.com. 20 May 2024. Retrieved 17 June 2024.
- ^ Jack Raines,"Schrödinger's head of macro". sherwood.news. Retrieved 17 June 2024.
- ^ a b c Chris Dolmetsch,"Einhorn's Greenlight Slams 'Head of Macro' in Fresh Lawsuit". bloomberg.com. 25 June 2024. Retrieved 4 September 2024.
- ^ "University of Florida: Administrators Force Student Group to Take Down Instagram Post". thefire.org. Retrieved 4 September 2024.