ESL Investments is a

privately owned A privately held company (or simply a private company) is a company whose shares and related rights or obligations are not offered for public subscription or publicly negotiated in the respective listed markets, but rather the company's stock is ...

hedge fund A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as ...

based in

Greenwich Greenwich ( , ,) is a town in south-east London, England, within the ceremonial county of Greater London. It is situated east-southeast of Charing Cross. Greenwich is notable for its maritime history and for giving its name to the Greenwich ...

Connecticut Connecticut () is the southernmost state in the New England region of the Northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, New York (state), New York to the west, and Long Island Sound to the ...

History

ESL Investments is managed by

Edward Lampert Edward Scott Lampert (born July 19, 1962) is an American billionaire businessman. He is the former CEO and chairman of Sears Holdings (SHLD), founder of Transform Holdco LLC, and founder, chairman, and CEO of ESL Investments. Until May 2007, he ...

, who founded it in April 1988 and named it after his initials. The firm invests in the American

public equity A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (list ...

and

hedging market A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insuran ...

s. Managing the fund with a

contrarian investing Contrarian Investing is an investment strategy that is characterized by purchasing and selling in contrast to the prevailing sentiment of the time. A contrarian believes that certain crowd behavior among investors can lead to exploitable mispric ...

approach, Lampert is the company's chairman and chief executive officer, and William Crowley is its president and chief operating officer. 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. Most of ESL's portfolio consists of retail companies, particularly

Kmart Kmart Corporation ( , doing business as Kmart and stylized as kmart) is an American retail company that owns a chain of big box department stores. The company is headquartered in Hoffman Estates, Illinois, United States. The company was inc ...

(now Transform SR Brands LLC), by far the company's largest holding (53.5% ownership as of June 2010). The revenue from Kmart plays a big part in helping ESL acquire other companies. Lampert began trading in stocks at the investment bank

Goldman Sachs Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, Ho ...

during the 1980s. In 1988 Lampert founded ESL Investments with the backing of investor Richard E. Rainwater and an initial outside investments worth $28 million. It was reported in 2004 that from 1988 through 2004 the fund returns averaged 29% a year. His clients have included

David Geffen David Lawrence Geffen (born February 21, 1943) is an American business magnate, producer and film studio executive. He co-created Asylum Records in 1971 with Elliot Roberts, Geffen Records in 1980, DGC Records in 1990, and DreamWorks SKG in ...

(1988 - 2007), Michael Dell, the Tisch family (owners of

Loews Corporation Loews Corporation is an American conglomerate headquartered in New York City. The company's majority-stake holdings include CNA Financial Corporation, Diamond Offshore Drilling, Boardwalk Pipeline Partners, Loews Hotels and Altium Packaging. ...

), and the Ziff family (owners of

Ziff Davis Ziff Davis, Inc. is an American digital media and internet company. First founded in 1927 by William Bernard Ziff Sr. and Bernard George Davis, the company primarily owns technology-oriented media websites, online shopping-related services, an ...

) (1988 - 2013). 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 Sears, Roebuck and Co. ( ), commonly known as Sears, is an American chain of department stores founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck and reincorporated in 1906 by Richard Sears and Julius Rosenwald, with what began a ...

. At the start of the

financial crisis of 2007–2010 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fi ...

, however, ESL's retail holdings were severely affected due to a drop in consumer spending, and the company's investment in

Citigroup Citigroup Inc. or Citi ( stylized as citi) is an American multinational investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking giant Citicorp and financial conglomera ...

in September 2007 saw a significant drop in value since the fund made its investment. Through the fund, Lampert is worth approximately $2 billion. 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.

Assets under management

References

{{reflist, colwidth=30em, refs= {{cite web , access-date=2010-06-04 , url=https://abcnews.go.com/Business/story?id=3934534&page=1 , title=Hedge, private-equity managers bruised , work=ABC News , date=2007-11-29 , author=Krantz, Matt {{cite web , access-date=2010-06-04 , url=https://www.bloomberg.com/apps/news?pid=20601103&sid=ai5qQcW6SJTI&refer=us , title=Lampert's ESL Fund Holds $800 Million Citigroup Stake (Update4) , publisher=Bloomberg , date=2007-05-16 , author1=Weiss, Miles , author2=DiStefano, Joseph N. {{cite web , access-date=2010-06-04 , url=http://moneycentral.msn.com/ownership?Symbol=shld , title=Sears Holdings Corp: Ownership , publisher=MSN Money , archive-url=https://web.archive.org/web/20100223224256/http://moneycentral.msn.com/ownership?Symbol=SHLD , archive-date=2010-02-23 , url-status=dead {{cite web , access-date=2010-06-04 , url=http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=1546464 , title=ESL Investments Inc. , work=BusinessWeek {{cite web , access-date=2010-06-04 , url=https://www.telegraph.co.uk/finance/2916456/Pay-packet-worth-1bn-makes-US-hedge-fund-manager-king-of-the-castle.html , title=Pay packet worth $1bn makes US hedge fund manager king of the castle , work=The Telegraph , date=2005-05-28 , author=Litterick, David Financial services companies established in 1988 Hedge fund firms in Connecticut