* Einhorn nursed loss in December which shrunk year's gain
* Apple, gold hurt Einhorn and Loeb
* Loeb won on Greek bonds, Yahoo
By Svea Herbst-Bayliss and Matthew Goldstein
BOSTON/NEW YORK, Jan 4 Widely followed hedge
fund managers Daniel Loeb and David Einhorn ended the year on
divergent notes with Loeb's firm handily beating the broader
stock market and Einhorn's firm posting a modest single-digit
annual gain after performing poorly in December.
For Einhorn, who has moved stock prices by simply opening
his mouth, 2012 ended with lackluster returns when his
Greenlight Capital lost 2.8 percent in December, a person
familiar with the fund's performance said.
Thanks to losses on computer maker and market darling Apple
Inc and in the gold market, Einhorn's investors saw
their once healthy double-digit gain shrivel late in the year to
leave Greenlight Capital with an 8.3 percent increase for 2012.
Einhorn is among a handful of particularly committed Apple
investors; he mentioned the company as a favorite pick in May
and has told investors that he expected the stock price to hit
$700, which it did very briefly in September. In the last three
months, however, the price has tumbled about 20 percent and is
currently trading at around $531.
With his annual return, Einhorn lagged the broader stock
market where the S&P 500 index ended the year with a 13.4
percent gain, excluding dividends. The average global hedge fund
gained only 3.17 percent, according to data from Hedge Fund
The disappointing end of the year performance at Greenlight
Capital illustrates how even a highly influential manager like
Einhorn, who has enjoyed something of a cult following in the $2
trillion hedge fund industry ever since his bearish call on
Lehman Brothers in early 2008, can stumble.
For much of the year speculation mounted over which stocks
Einhorn would pick or pan with General Motors and Marvell
Technology Group getting the thumbs up from the
But Marvell's stock price tumbled at the end of the year
after it was ordered to pay $1.17 billion to settle a patent
infringement lawsuit likely costing Greenlight Capital millions
A spokesman for Einhorn declined to comment.
At the same time, Einhorn clearly failed to cash in on
supplements company Herbalife where his probing
questions on a conference call in May sent the company's share
price tumbling and fanned widespread talk that he might be
preparing to short the stock price.
But in the end it was William Ackman's Pershing Square
Capital Management that unveiled its own big short against
Herbalife in late December, helping salvage an otherwise
lackluster year for the $11 billion fund. Pershing Square gained
5.8 percent in December to end the year up 12.4 percent, an
investor in the fund said.
In 2011, it was Einhorn who got a big boost from having said
very publicly in October that he was shorting Green Mountain
Coffee Roasters. The ensuing plunge in Green Mountain
shares helped Greenlight end 2011 up 3 percent, after being in
negative territory for much of 2011.
Meanwhile Loeb, known for his sharp tongue and muscle in
trying to get some big U.S. companies to shape up their
business, had another stellar year, investors in his $9.3
billion firm said.
His Third Point Ultra fund, which uses borrowed money to
boost returns, delivered a 33.6 percent gain for the year after
climbing 5.4 percent in December. His Third Point Offshore fund
gained 21.1 percent after rising 3.6 percent in December.
While Loeb was also hurt by a drop in the price of Apple and
gold, he more than made up for it with savvy bets on Greek
government bonds and Yahoo.
He told investors in October that he had scooped up certain
Greek government bonds for about 17 cents on the dollar, which
were part of a so-called "strip" of 20 newly issued bonds that
mostly trade bundled together. Loeb said the market was
mistakenly pricing the debt to reflect a Greek exit from the
euro zone currency area, something Loeb thought was unlikely and
something which has not happened.
Third Point was not available for comment.
Even as many managers are still compiling their 2012
numbers, some hedge fund investors have characterized the year
as largely subpar with only a handful of big-name managers able
to deliver the kind of outsized returns that made the industry
Activist investing strategies, as pursued by Ackman's
Pershing Square and Barry Rosenstein's JANA Partners, were among
the industry's biggest winners. JANA's Nirvana Fund gained 33.3
percent for the year while its JANA Partners fund returned 23.2
percent, an investor in the fund said.
Also veteran stock picker Leon Cooperman's Omega Advisors,
turned out of their downtown Manhattan offices for weeks by
Hurricane Sandy, delivered strong returns with a net return of
26 percent, a person invested with Omega said.
Kenneth Griffin's $14 billion Citadel told investors that
its flagship Wellington multi-strategy fund gained 3.4 percent
in December to end the year up 25.5 percent, someone familiar
with the portfolio said.
Steven Cohen's SAC Capital Advisors, with $14 billion under
management and long known for its strong and steady returns,
ended the year up 12 percent, people familiar with the portfolio
said. Och-Ziff Capital Management, a $32 billion favorite with
pension funds and governments, reported that its Master Fund
climbed 11.18 percent last year.