Einhorn Says in a Word If He Shifted Bets for Election: ‘No’

Updated on
  • Hedge fund manager answers whether he made ‘tactical moves’
  • Portfolio is balanced, individual stocks may move on outcome

Hedge fund manager David Einhorn opted against shifting his portfolio to prepare for market volatility tied to the results of U.S. elections.

Asked in a conference call Tuesday if he made any “tactical moves” to prepare for the eventual outcome, Einhorn answered: “No.”

“I’m sure it matters to a lot of the holdings. It’s not clear when it matters to the portfolio as a whole, however,” Einhorn said on a conference call discussing results for Greenlight Capital Re Ltd., the Cayman Islands-based reinsurer where he is chairman. “The portfolio is a mix of longs and shorts, and I’m sure various securities will be impacted in different ways.”

Einhorn’s approach contrasts with the strategy of Dan Loeb, another hedge fund manager who oversees investments for an offshore reinsurer. Loeb said last week in a conference call for Bermuda-based Third Point Reinsurance Ltd. that he reduced some positions and increased hedges on concern that election-related surprises could rattle financial markets.

Voters in the world’s largest economy are deciding Tuesday between former Secretary of State Hillary Clinton, the Democratic nominee, and her Republican opponent, real estate mogul Donald Trump. The S&P 500 Index surged 2.2 percent Monday as polls showed Clinton solidifying her lead. That followed nine straight days of declines that coincided with improved standing by Trump.

Third-quarter results at Einhorn’s reinsurer benefited from gains on holdings such as chemical company Chemours Co. and iPhone maker Apple Inc. Short positions, in which Einhorn bet on stocks declining, were hurt in the three months ended Sept. 30. The hedge fund manager reiterated that he believes companies such as Athenahealth Inc., Caterpillar Inc. and some oil frackers are overpriced.

Greenlight Re slipped 5 cents to $20.35 at 9:58 a.m. in New York, narrowing its advance for the year to 8.8 percent after two straight annual declines. While Einhorn’s investments have improved in recent months, the company has been burned by unprofitable insurance contracts and was downgraded last week by ratings firm A.M. Best to A-.

Robert Glasspiegel, the Janney Montgomery Scott analyst who inquired about the investment portfolio, also asked about capital management. With the company no longer defending an A rating, could Greenlight Re begin to use funds for share buybacks? he asked.

Einhorn took that question and gave another brief response: “This is David, and the answer is yes.”

— With assistance by Katherine Chiglinsky, and Jordyn Holman

(Updates with comment on possible buybacks in last paragraph.)
    Before it's here, it's on the Bloomberg Terminal. LEARN MORE