David Einhorn Fan Club Suffering Very Few Resignations

Greenlight Capital investors are standing by their man.

It’s a subject we have broached gingerly, namely, David Einhorn and Greenlight Capital’s terrible awful no good very bad year. As it happens, we’re not alone in tackling that delicate subject, well, delicately. Or, in the case of those you might expect to be most exercised about the whole thing, at all.

Most of the drop in Greenlight’s assets -- from $11.8 billion at the start of 2015 to $8.6 billion this year -- is commensurate with declines in performance, according to Bloomberg calculations based on fund returns disclosed in the presentation. At least $600 million of the drop can’t be explained by performance and is probably the result of redemptions, using conservative assumptions. The actual number may be higher.

At the presentation at the American Museum of Natural History in New York, Einhorn described withdrawals as minimal, according to a person who attended.

How does he do it? Carrot and stick, my friends.

The hedge fund has accumulated roughly 800 investors since it started in 1996, and they have enjoyed average annual returns of 16.5 percent, according to the firm’s presentation to investors on Jan. 19. Some 30 percent of the firm’s outside assets are locked up in contracts or vehicles that made withdrawal unlikely or impossible at the end of 2015. If clients were to pull out, getting back in is difficult: The fund rarely raises new money.

Einhorn Under Pressure as Greenlight Shrinks by $3.2 Billion [Bloomberg]