David Einhorn’s Greenlight Capital invests in gold

David Einhorn’s Greenlight Capital cut its stakes in its top two holdings, U.S. housebuilder Green Brick Partners and Pennsylvania coal miner Consol Energy , and instead plowed millions into gold in the third quarter, the New York hedge fund’s 13-F filings show.  

The hedge fund, which was founded by David Einhorn in 1996, increased its investment in the SPDR Gold Trust
by 89.22% in the third quarter, as he channeled $34.9 million into the exchange traded fund which tracks the price of gold bullion. 

Greenlight first bought shares in the SPDR Gold Trust in the second quarter of 2020, during a gold price rally driven by investors seeking to protect themselves against the economic chaos wrought by COVID-19. Any investments in gold through futures contracts wouldn’t show up in this regulatory filing. 

The investment fund, which is famous for successfully shorting Lehman Brothers in the runup to the 2008 crash, now has a bigger stake in the SPDR Gold Trust than at any prior point, as gold prices have again started to rally in recent months. 

Investments in gold are widely considered to offer a safe haven for investors in the face of volatile markets and high levels of inflation, meaning gold prices generally rise during periods of uncertainty. 

Greenlight’s gold investments came as the hedge fund sold off millions worth of shares in the two stocks that make up more than two-fifths of its holdings, Green Brick Partners
and Consol Energy

The sell offs saw the New York fund cut its stake in property developer Green Brick Partners – which operates in the U.S. states of Texas, Georgia, and Florida – by 25.65% in the third quarter.

The divestments now leave Greenlight, which controls $1.76 billion in assets, with fewer shares in the U.S. housebuilder than at any point since it first bought 15,641,805 shares in the company in the fourth quarter of 2014. 

Greenlight’s more than $510 million stake in Green Brick, however, remains the New York investor’s largest holding, in accounting for 29.1% of its portfolio.

The New York fund also slashed its stake in Pennsylvania headquartered coal miner Consol Energy by 15.52% in the third quarter, following a spike in the company’s share price that saw the energy firm’s stock surge to record highs in October. 

The fund’s stake in Consol Energy accounts for 14.33% of its entire portfolio, at a value of more than $250 million.

Greenlight also upped its stakes in a variety of stocks in industries including energy, tech, and healthcare, as it invested millions in firms including natural gas producer Southwestern Energy
and IBM spin off company Kyndryl Holdings

Those investments also saw Greenlight increase its stakes in oil and gas services company Seadrill
camera maker GoPro
electricity generator Net Power
and Canadian mining company Teck Resources
which on Tuesday agreed to sell its metallurgic coal mining operations to Glencore

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