GO
Loading...

Enter multiple symbols separated by commas

CNBC's Faber: Lampert Plans to Raise Billions for ESL Fund

Eddie Lampert, the billionaire hedge fund manger and controlling shareholder of Sears Holdings, is embarking on an effort to raise billions in new money for his widely successful hedge fund, ESL, according to people familiar with the situation.

Edward Lampert
AP
Edward Lampert

ESL is already a giant, with assets in excess of $18 billion. But Lampert has rarely raised new money. Almost all the assets in the fund are the result of compounding, given his 19 year old fund has delivered annual returns, net of fees, that approach 30%. And the fund's largest position, a 40% stake in Sears Holding, is not exactly liquid.

Rather than raise money by pursuing his own marketing strategy, Lampert has enlisted Goldman Sachs to raise him what is expected to be between $3 and $5 billion. Goldman will essentially be doing a private placement of limited partnership units in ESL. The minimum investment is $25 million.

And the money will carry a five year lock up with six months notice due to withdraw or else you're in for another five years. Lampert has traditionally had long lock-ups given his style of investing is to take large positions and hold them for many years.

Goldman is expected to have some sort of modified road show for the capital raising. While $3 to $5 billion in new funds may be the target, given the unprecedented liquidity in the market and the track record of ESL, it's possible the offering could attract more than $5 billion.

Why is Lampert raising money now? A spokesman for ESL declined comment, but the obvious answer would be because he can. Of course, raising so much new money will allow Lampert to either increase the size of some his current positions, including a stake in Citigroup, or begin to take some new large stakes.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Wisconsin Governor Scott Walker rides a motorcycle near Boone, Iowa in June.

    Media consultant Mark Macias offers up his advice for what Scott Walker needs to do to get America's attention.

  • Treasure hunter mel fisher and his team, circa 1985, off the Florida Keys, at discovery of a Spanish galleon sunk in 1622

    Shipwreck treasures hit the auction block

  • The end zone

    Sports are big business in this country. ESPN's Jemele Hill and Forbes Executive Editor Mike Ozanian discuss "Deflategate," NFL Commissioner Roger Goodell's battles as he deals with the NFL's future, and the fight for sports eyeballs and ratings.

U.S. Video