Greenlight Capital Said To Suffer $400M in Redemptions

Jul 14 2017 | 8:37pm ET

David Einhorn’s hedge fund manager Greenlight Capital reportedly suffered a rash of redemptions at the six-month market of 2017, as more than 15% of investors eligible to receive their money back elected to cash out. 

The redemptions totaled more than $400 million, according to a Reuters article citing the Wall Street Journal. Greenlight was down 2.3% for the year-to-date through the end of June, compared to a more than 8% climb in the S&P 500, as the famed stockpicker shorted a basket of momentum-driven tech stocks such as Elon Musk’s automaker Tesla, up 148% through the first half and still 51% higher than it was twelve months ago. Einhorn has publicly questioned how the firm’s market valuation squares with its lack of profitability.  

Greenlight’s main fund gained 9.4% in 2016 following a disastrous 2015 in which it lost 20%. Einhorn founded the firm in 1996 with $1 million in initial capital sourced from family and friends, and has booked annualized net returns of approximately 16% since inception. 

The firm’s flagship fund has reportedly been closed to new capital since late 2014, according to the Journal article. The company, which manages around $7 billion, is not concerned about investor withdrawals since no outside investor represents more than 2% of assets, the company said to Bloomberg on Friday.

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