FILE PHOTO -- David Einhorn, president of Greenlight Capital speaks at the Sohn Investment Conference in New York City, U.S. May 4, 2016. REUTERS/Brendan McDermid/File Photo
March 1, 2018
BOSTON (Reuters) – Billionaire hedge fund investor David Einhorn told clients on Wednesday that his fund suffered fresh losses in February when markets tumbled because investors feared central bankers may have to hike interest rates more quickly.
Greenlight Capital tumbled 6 percent in February almost the same amount it lost in January, raising the New York firm’s loss for the year to 11.9 percent, a performance update sent to clients and seen by Reuters showed.
The broader Standard & Poor’s 500 stock index has gained 1.5 percent in the first two months of 2018.
Einhorn addressed his firm’s poor start to the year earlier in February when he discussed results on an earnings call for Greenlight Capital Re., the reinsurance company where he is chairman. “While we’ve never underperformed like this, our prior worst underperformance compared to the S&P came in March of 2000, which was a similar environment,” Einhorn said.
Einhorn has long bet that certain technology stocks including Amazon and Tesla would fall but his short bets appear not to have helped him even as stocks faltered in February.
Investors are especially eager for a scorecard on how hedge funds performed this month after these types of portfolios long marketed themselves as being able to protect capital in tumbling markets even if they lagged when stocks were climbing.
Einhorn earlier in February acknowledged that value investors were suffering, yet he laid out hopes for their comeback. “While the environment has remained difficult with growth stocks accelerating their outperformance against value stocks this year including February, we think a reversion may finally be coming soon.”
(Reporting by Svea Herbst-Bayliss; editing by Diane Craft and Grant McCool)