Greenlight Capital is a hedge fund birthed by noted hedge fund manager David Einhorn back in 1996 with a grand total of $900,000. Roughly half of that $900k came from his parents (talk about pressure to perform).
Through a series of outstanding long and short investments primarily in equities and corporate bonds Einhorn has steered Greenlight to average annual returns of more than 25% after fees to his investors.
Einhorn uses minimal leverage and has a fairly low turnover. It is known for taking a thoroughly reasoned and researched stance on each of its investments and generally holds on until its thesis is proven right.
Some of Greenlight’s most notable wins include shorting Lehman and also Allied Capital. Einhorn was pilloried for shorting both and for laying out a carefully research argument as to why these companies made great targets for shorting. But in the end he was proven right.
Greenlight adds to a stake in Seagate: “Though the shares advanced from $16.40 to $26.96 during the quarter, the share price remains at a very low multiple of both near-term and longer term earnings. Based on our somewhat more conservative revenue outlook in 2012, we expect earnings to reach $10-$15 per share this calendar year, before settling at an average of about $5 per share in future years when the industry shortage will have ended.”