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Greenlight Capital Inc

Last Updated: 12/3/2020

Greenlight Capital Inc is a Corporation that started in 1996 and is primarily owned and controlled by David Einhorn.

Per its brochure, Greenlight is a value-oriented investment management firm that primarily invests and trades in long and short publicly listed equity securities, as well as distressed debt when cyclically attractive.

Greenlight Capital Inc operates out of an office in New York, NY. Based on the Form ADV filed on 2020-03-30 00:00:00, the investment firm is comprised of 29 employees, only 12 of whom performs investment advisory functions.

Fact Sheet

      Name: Greenlight Capital Inc
      CRD No: 157083
      Filing Recorded: 2020-03-30 00:00:00
      Year of Origin: 1996
      Employees: 29
      Clients: 5
      AUM: 1,617,653,882
      Management Fee: 1.5 Percent
      Performance Fee: 20 Percent
      Client Type: Pooled Investment Vehicles
      Assets Traded: Unspecified


Investment Strategy

According to the brochure submitted to IAPD, Greelight Capitals investment strategy is as follows:

We believe that capital markets are efficient over the long term. At the same time, however, we recognize that capital markets are inefficient over the short term in certain circumstances. The challenge we see for investors seeking to consistently outperform a market yardstick lies in 1) the recognition of temporary inefficiencies and/or the circumstances giving rise to such inefficiencies and 2) the ability to capitalize upon these value dislocations in a timely fashion.

We believe that a security’s trading value is influenced by each of the following:

Fundamentals: This refers to a security’s “intrinsic” value. We define intrinsic value as the present value of the cash flows that will be distributed to the owners of a security discounted at a rate that properly reflects the time value of money, the risk that expected cash flows will not be obtained, the volatility of the cash flows, and the security’s liquidity. In the case of corporate securities, the cash flows derive either from the company’s operations or from the sale of the company’s operations and/or its assets.

Technicals: This refers to a security’s historical trading pattern and prices. An example of a strategy that relies largely upon technical analysis is “momentum” investing wherein investors purchase securities that have recently appreciated in price in the expectation of further price increases.

Psychology: This refers to the propensity of investors to make investment decisions based upon greed and fear. Investors who have made money in an investment are often inclined to hope for additional profits and increase their exposure, while investors who have lost money in an investment are often inclined to worry about further losses and reduce their exposure. In today’s markets, group psychological swings foster excessive movements in security prices.

Liquidity: This refers to the amount of capital committed to investing in an asset class vis-à-vis the size of the asset class. Assuming that intrinsic value remains unchanged, supply and demand dictate that security prices will rise when additional investment capital enters an asset class and will fall when investment capital leaves an asset class. For example, in today’s equity market, when investors add liquidity by purchasing mutual funds or Exchange-Traded Funds, the managers of those funds face pressure to buy stocks regardless of the cheapness or dearness of equity prices.

We believe that trading values in the long term are determined by fundamental analysis. Notwithstanding this belief, technical, psychological and liquidity factors clearly influence trading values in the short term. Such temporary value dislocations create attractive opportunities for the alert, diligent and patient investor focused on intrinsic value.

Dislocations between intrinsic and trading values exist in two forms. In the first form, the influences of technicals, psychology and liquidity cause trading value to diverge from Page 8 intrinsic value. The market temporarily focuses on something other than intrinsic value. We invest on the premise that the market will refocus on fundamentals and when it does trading value will converge with intrinsic value. In the second form, the market miscalculates intrinsic value due to a lack of either effort or ability. Here, we invest on the premise that the market will correct its assessment of intrinsic value and that the trading value will adjust accordingly

We believe that an investment approach that emphasizes intrinsic value will achieve consistent absolute investment returns and safeguard capital regardless of market conditions.

Methods of Analysis

In addition, Greelight Capitals methods of analysis include:

We believe that there are four essential steps in making an investment. We believe our investment professionals possess particular competence with respect to each of these steps— identification, analysis, strategy and execution.

Opportunity Identification: We benefit from a voluminous and diverse flow of ideas. We have developed substantial professional relationships with investment bankers, lawyers, independent researchers, brokers, sell-side analysts, other fund managers, and corporate managers. Such relationships afford the Capital Funds numerous opportunities that are consistent with our philosophy...

Opportunity Analysis: In view of the unquestionable breadth and diversity of investment opportunities available to the sophisticated investor, consistent outperformance in the capital markets requires successive narrowings of the opportunity universe based both upon one’s competencies and one’s desired level of risk. We invest primarily in publicly listed equity securities and corporate debt. In assessing a potential investment in a company, we typically use thorough financial analysis to determine whether or not a disparity exists between the company’s intrinsic value and its market value...

Investment Strategy: Any particular security of any particular company may be an attractive investment on its own merits, in relation to another security of the same company, or in relation to a security of another company. In each opportunity, we seek to optimize the risk/return ratio. Our professionals have experience not only in buying publicly listed equity securities and corporate debt, but also in selling securities short and investing in private placements, futures, currencies, commodities, credit default swaps, interest rate swaps, sovereign debt, derivatives and other instruments. Before committing capital, we generally conduct a thorough evaluation of available investment instruments in order to best exploit an opportunity...

Concentration of Investments: Although it occurs from time-to-time, we generally do not initiate or add to any single equity investment if that investment would constitute more than 20% of the portfolio on the long side or 10% on the short side. Portfolio allocations reflect our relative confidence in the investments.

Top 10 Holdings from Form 13F

Reporting Period: 09/30/2020

Issuer Share Value(1000s) Put/Call
GREEN BRICK PARTNERS INC 12,832,821 206,608
GREEN BRICK PARTNERS INC 7,819,054 125,887
SPDR GOLD TR 314,030 55,621
BRIGHTHOUSE FINL INC 1,702,292 45,809
CHANGE HEALTHCARE INC 2,596,405 37,674
AERCAP HOLDINGS NV 1,393,220 35,095
BRIGHTHOUSE FINL INC 1,289,703 34,706

Historical 13F Filings

EdgeGiant has compiled all 13F filings since Q2 2013 for your convenience. You can view historical portfolio position forGreenlight Capital Incin our 13F section HERE.

To get the comprehensive list of holdings that fall under 13F regulatory guidelines, check out our write up on how to access and use 13Fs in your personal investment decisions.

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Historical Portfolio Holdings for Greenlight Capital Inc