Edward Lampert started his own fund management by establishing ESL Investments in 1988 after earning an economics degree with at Phi Beta Kappa from Yale University and then cutting his teeth under Robert Rubin at the risk arbitrage department at Goldman Sachs when he decided to go out on his own, Rubin warned it was a bad career decision.
The name ESL derives from Lampert's initials and with financial support from Richard Rainwater, whom he had met on Nantucket Island, who gave him $28 million in seed money and introduced him to clients, such as David Geffen. In 2003, he was kidnapped from the parking lot of his office, but Lampert convinced his captors to let him go after two days.
ESL Investments has returned an average of 29 percent a year since its inception, according to a BusinessWeek report, generally by building substantial positions in a few highly researched holdings. Besides stakes in Kmart and Sears, Lampert's fund also owns large positions in car dealer AutoNation and auto-parts retailer AutoZone.
That concentrated approach has paid off handsomely for Lampert, who in 2003 took home a $420 million pay package, the fourth-biggest in the hedge fund industry, according to Reuters.
With his savvy bets on distressed or underperforming assets, he has built a reputation as a one of Wall Street's most successful and renowned hedge fund managers. His earnings in 2004 were estimated to be $1.02 billion USD; making Lampert the first Wall Street financial manager to exceed an income of $1 billion in a single year.
No comments:
Post a Comment