This content is from: Portfolio

Greenlight Still Lags Mr. Market

Though David Einhorn’s hedge fund trails the major indexes this year, his commentary later in the week will no doubt capture investors’ attention.

David Einhorn’s hedge fund investors are still paying for underperformance. Einhorn’s Greenlight Capital posted a 2.1 percent gain in September, lagging the S&P 500, which climbed 2.4 percent. However, his 8.8 percent return for the third quarter easily exceeded the major indexes, and put him up 12.1 percent for the year-to-date. Even so, this comes up a bit short of the S&P 500, which is up 14.6 percent for the year.

If Einhorn just stands still the rest of 2012, however, he would post his best gain in three years and his second best year since 2006. Whether that’s enough to satisfy investors is another matter.

Greenlight is the first hedge fund to report September results.

The early data come from an investment account of Greenlight Capital Re, ­­an insurance company controlled by Einhorn. The account is managed by a Greenlight Capital entity.

It reported that at the end of September, the largest disclosed long positions in its investment portfolio were in Apple, Cigna, General Motors, gold and Seagate Technology. All but Cigna were disclosed among Greenlight’s six largest long positions at the end of August. Since then, Arkema and Marvell Technology Group fell out of this small group.

At the end of September, its investment portfolio was roughly 96 percent long and 70 percent short, compared with 101 percent long and 61 percent short the previous month. This exposure analysis does not include gold, credit default swaps, sovereign debt, cash, foreign currency positions, interest rate derivatives and other macro positions.

Earlier this summer Einhorn finished third in the richest poker tournament. He gave his $4.35 million in winnings to charity. This Tuesday Einhorn is certain to draw a lot of attention when he speaks at the annual Value Investing Congress in New York.

Last year he created a major buzz when he made a comprehensive, detailed case for shorting Green Mountain Coffee Roasters. Since its mid-September peak of $111.62, the stock has tumbled nearly 80 percent.

Related Content