Lampert Cuts Sears Stake Below 50% to Meet Redemptions

Money manager Edward Lampert cut his stake in Sears Holdings Corp. below 50 percent in order to pay investors who wanted to cash out of his hedge fund, according to a regulatory filing.

ESL Investments Inc.’s stake in the Hoffman Estates, Illinois, department store chain declined to 48.4 percent from 55.4 percent reported in March, according to a filing today with the U.S. Securities and Exchange Commission.

The decline stemmed from a distribution of Sears shares to investors in Lampert’s main hedge fund, according to today’s filing. Lampert has previously issued assets rather than cash to investors who wish to withdraw their capital. This permits the fund to avoid selling shares and incurring capital gains that would be taxable to the fund’s other investors.

“We will continue to focus on the transformation of Sears (SHLD) Holdings into a membership-focused company and on creating long-term value for its shareholders,” Lampert said in an e-mailed statement. “My significant personal ownership in the company is a sign of my confidence and alignment with all shareholders.”

To contact the reporter on this story: Miles Weiss in Washington at mweiss@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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