Eddie Lamperts troubles with Sears Holdings were
underscored this week when he reported just $5.7 billion in
U.S. assets as of year-end, down $3.4 billion, or 37 percent,
from $9.1 billion on September 30 and barely half the $10.1
billion reported on June 30.
Some of this decline reflects the 57 percent drop in the
value of his Sears shares, which accounted for 25 percent of
the equity assets at year-end and one-third at the end of
Over the past year, however, Lampert has also been
aggressively paring his positions in two very successful
long-time investments AutoZone and AutoNation, whose
shares rose 19 percent and 31 percent, respectively, in 2011
Lamperts hedge fund, ESL Partners, has been selling
the stock, in part, to meet redemptions from unhappy investors
and for the termination and winding up of Acres, one of
Lamperts partnerships. Some of the shares were used in
lieu of cash to distribute to investors.
In addition, ESL sold some of the shares to Lamperts
According to reports, ESL was down 12 percent in 2011 after
climbing about 18 percent in 2010 and 55 percent in 2009. But
it lost sizable sums the two previous years.
Altogether in 2011 ESL reduced its stake in AutoZone from
just over 11 million shares worth $3.5 billion to just under 3
million shares worth $965 million and its AutoNation stake from
more than 62 million shares worth $1.75 billion to 54 million
shares worth nearly $2 billion.
A knowledgeable source says this is only half the picture,
however. Rather, half the positions in ESL are parked in cash
or are invested in bonds; the 13f filing captures neither asset
If this is true, this means ESL still has more than $11
billion under management. But this is down from more than $17
billion in 2007.
So what does Lampert, who a number of years ago BusinessWeek
heralded as the next Warren Buffett, currently own in addition
to Sears, AutoZone and AutoNation?
One of his larger positions is $578 million in Gap, another
retail laggard, along with small positions in another retailer,
Big Lots, Seagate Technology, and several financials
Capital One Financial, CIT Group, Genworth Financial and iStar
So basically Lampert sacrificed his best stocks to pay off
fleeing investors. Now he is banking on some sort of miracle at
Sears, which he recently announced he is heavily
Even if financial stocks continue to rally, they only
account for about $870 million in assets; so they wont
have a huge impact on performance.
And his substantial assets in cash and bonds arent
exactly paying much these days.
Is Lampert planning to use this money to make a major new
purchase? We may not know for at least three more months when
the next 13F is filed (unless he receives permission to delay