While, inexplicably, Bill Ackman’s Pershing Square remains immune (according to Ackman at least) to redemptions despite posting a terrible return in the past two years, another hedge fund from the “glory days” is having less success in keeping LPs: the WSJ reports that Einhorn was “forced to pay back more than $400 million in clients withdrawals at midyear, as more than 15% of eligible investors chose to redeem their money” which again is surprising because unlike some other hedge funds, mostly on the macro side, which continue to post double digits losses, Greenlight was down only 2% in the first half of the year. Although, as we have been repeating since 2011, in a time when every hedge fund’s benchmark is the S&P actively managed by every central banker in the world, any and all active managers who underperform the broader market are targets. Greenlight has also underperformed his broader peer group with the average stock-picking hedge fund up 6% in H1 according to HFR.
As the WSJ notes, Einhorn, who manages $7 billion, “has been humbled. His repeated predictions of a swoon for some highflying technology companies are so far unrealized, while a recent push to split General Motors Co. stock was rejected by his fellow shareholders. Greenlight is just two years removed from its worst year ever, double-digit losses in 2015 that led Mr. Einhorn to confess at the next annual investor dinner that he had ‘failed miserably.’
This post was published at Zero Hedge on Jul 13, 2017.
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