Greenlight Capital’s performance
While last year wasn’t good for hedge funds in general, it turned out to be the worst on record for David Einhorn’s Greenlight Capital (GLRE). Vastly underperforming broader markets, the fund lost 34%.
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Focus on a few high-conviction bets
Greenlight Capital is now focusing on fewer names, and its highest conviction bets. In the first quarter, the fund rebounded by 11.0%. Meanwhile, the S&P 500 (SPY), Dow Jones Industrial Average (DIA), and NASDAQ (QQQ) gained 13.0%, 11.1%, and 16.5%, respectively. The company highlighted the fund’s first-quarter performance in an investor letter on April 12.
Ups and downs for Greenlight
Whereas just one position boosted Greenlight by ~1% last year, in the first quarter, it had eight positions with similar gains. Its biggest gainers in the quarter were:
- AerCap (AER)
- Brighthouse Financial (BHF)
- Deutsche Pfandbriefbank (PBB.DE)
- General Motors (GM)
- Green Brick Partners (GRBK)
Altice USA (ATUS), Tempur Sealy International (TPX) and Tesla (TSLA) short positions also contributed to Greenlight’s gains. Meanwhile, short positions in Assured Guaranty (AGO) and Bubble Basket and Netflix (NFLX) put options fell.