Einhorn’s Greenlight Defies April’s Rout With 10.6% Gain

(Bloomberg) — David Einhorn’s Greenlight Capital chalked a 10.6% gain in April, according to a person with knowledge of the firm’s performance, weathering the worst month for U.S. stocks in years.

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That brought his total return this year to 15.4%, the person said, asking not to be identified discussing the confidential results. A spokesperson for Greenlight declined to comment.

Einhorn, who founded the New York-based firm in 1996, has been signaling a bearish posture in recent weeks. In a letter to investors this month, the 53-year-old laid out concerns about the pace of Federal Reserve efforts to fight inflation and the potential for Russia’s invasion of Ukraine to hurt the U.S. economy.

“The market is beginning to price in its doubts about the Fed’s resolve and likely failure to return inflation to its 2% target. Even as the Fed resets the market’s expectation to a faster tightening cycle, inflation expectations are increasing and long-term bond prices are falling,” Einhorn wrote in the letter.

There was a lot of potential for some pessimistic bets to pay off.

The S&P 500’s monthly drop of 8.8% marked the index’s worst April performance since 1970. The Nasdaq 100 fell 13.4% for its biggest slump since 2008. And fixed income wasn’t spared either, with a benchmark tracking bonds worldwide dropping more than 5% for the worst month since at least 1990.

Einhorn’s performance over the past four months is better than what he achieved for all of last year. Greenlight ended 2021 up 11.9%, as technology shares and other growth companies faltered toward year-end and value stocks started climbing. In that case, Einhorn said in his fourth-quarter letter that almost all of the gains came from stocks he was long.

Einhorn is still clawing his way back from a 20% loss in 2015 and an additional 34% loss in 2018. He still needs a gain of 11.8% to get back to even.

(Adds quote from Q1 letter in fourth paragraph)