December 1, 2015 / 2:32 AM / 3 years ago

UPDATE 1-Einhorn's 20.6 pct loss puts fund on course for down year

(Adds details on Einhorn’s holdings, background on fund)

By Svea Herbst-Bayliss

BOSTON, Nov 30 (Reuters) - Hedge fund mogul David Einhorn has lost 20.6 percent this year as a bet on solar company SunEdison cratered in November, extending losses of his Greenlight Capital and putting it on course for its first losing year since the financial crisis.

Greenlight Capital dropped 5 percent in November, pulled down largely by SunEdison’s 56 percent drop, two people who saw the numbers said. The Standard & Poor’s 500 stock index gained 1.17 percent in November.

The loss all but ensures that 2015 will be a down year for Greenlight, marking only the second time that Einhorn, one of Wall Street’s savviest stock pickers, posted a loss since launching the firm in 1996.

Einhorn blamed much of the decline on SunEdison and thanked investors for supporting the fund during a difficult year, in a brief note sent to investors Monday evening, the sources said.

Einhorn had cut his SunEdison bet by 25 percent during the third quarter, leaving him with 18.6 million shares at the end of September, a filing showed.

For nearly two decades, Einhorn, who could move a company’s stock price merely by uttering its name in public, delivered average annual returns of 20 percent. In return, investors promised to lock up money for years, agreeing to some of Wall Street’s most restrictive terms.

In late summer, some investors worried that Einhorn’s positions were too concentrated, and by October he wrote in a letter that he had tweaked his bets and “decided to try to swing less hard.”

Still, the year’s losses are a rare black eye for Einhorn. So far, he lost money only in 2008 when the fund was off 22.7 percent and many fund managers were in the red.

This year his losses look more out of place, some industry analysts said, noting that many managers pared losses since being caught off guard in August by slower growth in China and fears of when the U.S. Federal Reserve will raise rates.

Barry Rosenstein’s Jana Partners fund, for example, lost 2.4 percent in November and is off 6.4 percent for the year, an investor said on Monday. Bill Ackman’s Pershing Square Holdings fund, which was off 25 percent in the middle of November, was down 20.7 percent as of Nov. 24, an investor said.

The average hedge fund is off 0.65 percent in November and down 2.27 percent for the year, research firm Hedge Fund Research said. (Reporting by Svea Herbst-Bayliss; Editing by Leslie Adler)

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