Greenlight drops 2.3% in first half amid stock market rally

NEW YORK: Greenlight Capital, the investment firm led by David Einhorn, made 1% in its main fund in June, trimming losses as its year-to-date returns lag behind the stock market.

The hedge fund, which mainly wagers on stocks, trailed the broader market and its peers in the first half of the year.

The Greenlight fund dropped 2.3% in 2017 through June, while the S&P 500 Index returned about 9.3%, including reinvested dividends, according to an investor update seen by Bloomberg News.

The average equity-focused hedge fund rose 5% this year through May, based on the HFRI Equity Hedge Index.

Jonathan Gasthalter, a spokesman for New York-based Greenlight, declined to comment.

Einhorn’s fund has been hit by its short bets this year, particularly wagers against what it calls a “bubble basket” of momentum-driven technology stocks.

Greenlight has said it’s been betting against carmaker Tesla Inc as part of this short portfolio; those shares have gained 69% this year.

“There you have a guy who’s done all kinds of fancy innovation and thinking about how society should be 50 years from now, 100 years from now,” Einhorn said of Tesla chief executive officer Elon Musk in a June interview on Bloomberg Television.

“But he’s yet to actually take any money and turn it into a profitable business, and I don’t have any optimism that will change.”

Greenlight is trying to make a comeback after a dismal 2015, when the main fund dropped more than 20%.

Though it rose 9.4% in 2016, Greenlight won’t be able to charge full fees to investors until the fund recoups its drop plus 150% of the value of those losses.