ESL Investments is a

privately held A privately held company (or simply a private company) is a company whose Stock, shares and related rights or obligations are not offered for public subscription or publicly negotiated in their respective listed markets. Instead, the Private equi ...

hedge fund A hedge fund is a Pooling (resource management), pooled investment fund that holds Market liquidity, liquid assets and that makes use of complex trader (finance), trading and risk management techniques to aim to improve investment performance and ...

based in

Greenwich Greenwich ( , , ) is an List of areas of London, area in south-east London, England, within the Ceremonial counties of England, ceremonial county of Greater London, east-south-east of Charing Cross. Greenwich is notable for its maritime hi ...

Connecticut Connecticut ( ) is a U.S. state, state in the New England region of the Northeastern United States. It borders Rhode Island to the east, Massachusetts to the north, New York (state), New York to the west, and Long Island Sound to the south. ...

History

ESL Investments is managed by Edward Lampert, who founded it in April 1988 and named it after his initials. The firm invests in the American

public equity A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (li ...

and

hedging market A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insuran ...

s. Managing the fund with a

contrarian investing Contrarian investing is an investment strategy that is characterized by purchasing and selling in contrast to the prevailing sentiment of the time. A contrarian believes that certain crowd behavior among investors can lead to exploitable mispr ...

approach, Lampert is the company's chairman and chief executive officer, and William Crowley is its president and chief operating officer. ESL is fairly unusual as a hedge fund in that it takes large stakes in a small number of companies and holds them for many years. Most of ESL's portfolio consists of retail companies, particularly

Kmart Kmart ( ), formerly legally registered as Kmart Corporation, now operated by Transformco, is a department-store chain and online retailer in the United States and Territories of the United States, its territories. It operates four remaining Kma ...

(now Transform SR Brands LLC), by far the company's largest holding (53.5% ownership as of June 2010). The revenue from Kmart plays a big part in helping ESL acquire other companies. Lampert began trading in stocks at the investment bank

Goldman Sachs The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...

during the 1980s. In 1988 Lampert founded ESL Investments with the backing of investor Richard E. Rainwater and initial outside investments worth $28 million. It was reported in 2004 that from 1988 through 2004 the fund returns averaged 29% a year. His clients have included

David Geffen David Lawrence Geffen (born February 21, 1943) is an American film producer, record executive, and media proprietor. In music, he co-founded Asylum Records with Elliot Roberts in 1971 before founding Geffen Records in 1980, DGC Records in 1 ...

(1988 - 2007),

Michael Dell Michael Saul Dell (born February 23, 1965) is an American billionaire businessman and investor. He is the founder, chairman, and CEO of Dell Technologies, one of the world's largest technology infrastructure companies. As of May 2025, accordin ...

, the Tisch family (owners of

Loews Corporation Loews Corporation is an American conglomerate headquartered in New York City. The company's majority-stake holdings include CNA Financial Corporation, Boardwalk Pipeline Partners, Loews Hotels and Altium Packaging. The corporation positions ...

), and the Ziff family (owners of

Ziff Davis Ziff Davis, Inc. is an American digital media and internet company. Founded in 1927 by William Bernard Ziff Sr. and Bernard George Davis, the company primarily owns technology- and health-oriented media websites, online shopping-related servi ...

) (1988 - 2013). In 2004, the fund made Lampert the first hedge fund manager ever to make more than $1 billion in a year, when the fund grew 69%, following his decision to buy Kmart and merge it with

Sears Sears, Roebuck and Co., commonly known as Sears ( ), is an American chain of department stores and online retailer founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck and reincorporated in 1906 by Richard Sears and Julius Rosen ...

. At the start of the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

, however, ESL's retail holdings were severely affected due to a drop in

consumer spending Consumer spending is the total money spent on final goods and services by individuals and households. There are two components of consumer spending: induced consumption (which is affected by the level of income) and autonomous consumption (which ...

, and the company's investment in

Citigroup Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services company based in New York City. The company was formed in 1998 by the merger of Citicorp, t ...

in September 2007 saw a significant drop in value since the fund made its investment. Through the fund, Lampert is worth approximately $2 billion. Lampert, who typically invests in undervalued stocks, is known to have modeled his investing style on Warren Buffett's style by analyzing his annual shareholder letters.

Assets under management

References

{{reflist, colwidth=30em, refs= {{cite web , access-date=2010-06-04 , url=https://abcnews.go.com/Business/story?id=3934534&page=1 , title=Hedge, private-equity managers bruised , work=ABC News , date=2007-11-29 , author=Krantz, Matt {{cite web , access-date=2010-06-04 , url=https://www.bloomberg.com/apps/news?pid=20601103&sid=ai5qQcW6SJTI&refer=us , title=Lampert's ESL Fund Holds $800 Million Citigroup Stake (Update4) , publisher=Bloomberg , date=2007-05-16 , author1=Weiss, Miles , author2=DiStefano, Joseph N. {{cite web , access-date=2010-06-04 , url=http://moneycentral.msn.com/ownership?Symbol=shld , title=Sears Holdings Corp: Ownership , publisher=MSN Money , archive-url=https://web.archive.org/web/20100223224256/http://moneycentral.msn.com/ownership?Symbol=SHLD , archive-date=2010-02-23 , url-status=dead {{cite web , access-date=2010-06-04 , url=http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=1546464 , archive-url=https://web.archive.org/web/20071119015825/http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=1546464 , url-status=dead , archive-date=November 19, 2007 , title=ESL Investments Inc. , work=BusinessWeek {{cite web , access-date=2010-06-04 , url=https://www.telegraph.co.uk/finance/2916456/Pay-packet-worth-1bn-makes-US-hedge-fund-manager-king-of-the-castle.html , title=Pay packet worth $1bn makes US hedge fund manager king of the castle , work=The Telegraph , date=2005-05-28 , author=Litterick, David Financial services companies established in 1988 Hedge fund firms in Connecticut Shareholder-rights activists