Steve Eisman, who rose to fame after betting against subprime mortgages in 2007 and then ran his own hedge fund, is back working with his parents.
Eisman, 52, joined the Eisman Group within Neuberger Berman Group as a managing director in September, according to a person with knowledge of the matter, who asked not to be identified because the information is private. The group, run by partners including Elliott and Lillian Eisman, oversees $812 million within portfolios of stocks for wealthy clients.
For Eisman, working with his mother and father means coming full circle after they helped him get a job in finance more than two decades ago at Oppenheimer & Co., where they were brokers. He later moved to hedge funds and was chronicled as one of the winners from the U.S. housing crash in Michael Lewis’s book “The Big Short” for money he made at FrontPoint Partners.
Eisman confirmed he joined and declined further comment.
The Harvard Law Graduate told Lewis that he “hated being a lawyer” and that his parents got him the job. Lillian had created a group inside Oppenheimer and his father then quit law after being “spooked” by midlevel Mafia clients, according to the book. They’d instructed their son, who grew up in New York, that the best way to learn about Wall Street was to become an equity analyst.
Eisman quickly became an expert in consumer finance companies, spotting egregious lending and potential fraud, which later alerted him to the growing dangers of subprime mortgages.
Lewis characterized Eisman as a fearless contrarian with a disdain for Wall Street who speaks his mind and lacks manners.
After success during the subprime crisis, Eisman was managing about $750 million at FrontPoint by the start of 2011, when the firm ran into trouble. Investors pulled their money following allegations that Joseph “Chip” Skowron, a co-portfolio manager of the firm’s health-care strategy, traded on insider information. Skowron is currently serving a five-year prison sentence for insider trading.
Eisman started New York-based Emrys Partners in 2012 with an investment philosophy based around analyzing the health of the financial system rather than looking solely at the fundamentals of individual companies. While he posted returns of 3.6 percent in 2012 and 10.8 percent in 2013, he shut the firm, which managed about $200 million, last year, according to the Wall Street Journal.
Neuberger Berman, which has $250 billion firmwide in stocks, fixed income, private equity and hedge fund strategies, has about 20 teams within its private asset management group, according to the firm’s website. It added what started as a three-member team -- the Eismans and Michael Cohen -- in 1999 from CIBC Oppenheimer, that’s become the Eisman Group.