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ESL Investments

ESL Investments
Company typePrivate
IndustryInvestment
Genre
FoundedApril 1988; 36 years ago (April 1988)
FounderEddie Lampert
HeadquartersGreenwich, Connecticut
Key people
OwnerEddie Lampert
Subsidiaries

ESL Investments is a privately held hedge fund based in Greenwich, Connecticut.

History

ESL Investments is managed by Edward Lampert, who founded it in April 1988 and named it after his initials. The firm invests in the American public equity and hedging markets. Managing the fund with a contrarian investing approach, Lampert is the company's chairman and chief executive officer, and William Crowley is its president and chief operating officer.[1] ESL is fairly unusual as a hedge fund in that it takes large stakes in a small number of companies and holds them for many years.[2] Most of ESL's portfolio consists of retail companies, particularly Kmart (now Transform SR Brands LLC), by far the company's largest holding (53.5% ownership as of June 2010).[3] The revenue from Kmart plays a big part in helping ESL acquire other companies.[4]

Lampert began trading in stocks at the investment bank Goldman Sachs during the 1980s.[5] In 1988 Lampert founded ESL Investments with the backing of investor Richard E. Rainwater[5] and initial outside investments worth $28 million.[6]

It was reported in 2004 that from 1988 through 2004 the fund returns averaged 29% a year.[5] His clients have included David Geffen (1988 - 2007),[7] Michael Dell, the Tisch family (owners of Loews Corporation), and the Ziff family (owners of Ziff Davis) (1988 - 2013).[4][7] In 2004, the fund made Lampert the first hedge fund manager ever to make more than $1 billion in a year, when the fund grew 69%, following his decision to buy Kmart and merge it with Sears.[8] At the start of the financial crisis of 2007–2010, however, ESL's retail holdings were severely affected due to a drop in consumer spending, and the company's investment in Citigroup in September 2007 saw a significant drop in value since the fund made its investment.[9] Through the fund, Lampert is worth approximately $2 billion.[4] Lampert, who typically invests in undervalued stocks, is known to have modeled his investing style on Warren Buffett's style by analyzing his annual shareholder letters.[2]

Assets under management

Year AUM in Bil.
USD$
1988[6] .028
2003[10] 5
2004[4] 4
2005[11] 10
2006[12] 17.5
2011[7] 10
2012[7] 5

References

  1. ^ "ESL Investments Inc". BusinessWeek. Archived from the original on November 19, 2007. Retrieved 2010-06-04.
  2. ^ a b Weiss, Miles; DiStefano, Joseph N. (2007-05-16). "Lampert's ESL Fund Holds $800 Million Citigroup Stake (Update4)". Bloomberg. Retrieved 2010-06-04.
  3. ^ "Sears Holdings Corp: Ownership". MSN Money. Archived from the original on 2010-02-23. Retrieved 2010-06-04.
  4. ^ a b c d Berner, Robert; Rutledge, Susann (22 November 2004). "The Next Warren Buffett?". United States: Bloomberg Businessweek. Bloomberg L.P. Retrieved 4 June 2010.
  5. ^ a b c Sorkin, Andrew; Atlas, Riva (18 November 2004). "The Architect Behind Kmart's Surprising Takeover of Sears". New York Times. United States. The New York Times Company. p. C1. Retrieved 14 May 2019.
  6. ^ a b Channick, Robert (18 April 2019). "Who is Edward Lampert? The hedge fund billionaire survived kidnapping and Kmart. Then came Sears". No. Business. United States: Chicago Tribune. Tribune Publishing Company. Retrieved 14 May 2019.
  7. ^ a b c d Smith, Randall (5 December 2013). "Investors, Dismayed by Losses at Sears, Pull Money From Hedge Fund". New York Times. No. DealBook. New York, N.Y., United States. The New York Times Company. p. B1. Retrieved 14 May 2019.
  8. ^ Litterick, David (2005-05-28). "Pay packet worth $1bn makes US hedge fund manager king of the castle". The Telegraph. Retrieved 2010-06-04.
  9. ^ Krantz, Matt (2007-11-29). "Hedge, private-equity managers bruised". ABC News. Retrieved 2010-06-04.
  10. ^ Spirojan, Leah (19 January 2003). "With Kidnapping of Executive, Security Has Become an Issue". New York Times. United States. The New York Times Company. p. CN14. Retrieved 14 May 2019.
  11. ^ Atlas, Riva (7 December 2005). "For Sears Shareholders, Silence Stirs Anxiety". New York Times. United States. The New York Times Company. p. C3. Retrieved 14 May 2019.
  12. ^ Mackintosh, James (24 May 2007). "Biggest hedge funds tighten grip". No. Alphaville. Financial Times. Nikkei. Retrieved 24 May 2019.
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