Eddie Lampert’s investment in Sears hasn’t been going well, and this news from The Wall Street Journal will only make things worse: Goldman Sachs clients invested with Lampert’s hedge fund want out.
This specific group of investors threw $US3.5 billion at Lampert in 2007. Back then Sears was trading at $US120 a share, now it’s around $US50. Horrible news for ESL, Lampert’s hedge fund, which started getting these redemption requests last year as the fund’s five-year lock-up period was about to expire.
Most of those funds have been getting paid out this year, including through the distribution of stock in some of his other investments, though some money is scheduled to be paid out later. Without the money raised through Goldman, more than $US2.5 billion in outside investor money remains in Mr. Lampert’s hedge-fund firm, ESL Investments Inc., the people said…
Their exits largely return Mr. Lampert’s investor base to what it was before Goldman’s raise: a core group of wealthy, individual investors who have profited handsomely by investing with the former Goldman trader over many years. ESL Investments has annualized returns of more than 20% a year for 20 years, according to a person familiar with the firm, giving it one of the strongest long-term track records in the industry.
So not all is lost, in case you were worried.