Monday, May. 08, 2006

Eddie Lampert

For moguls like Michael Dell and David Geffen, Edward S. (Eddie) Lampert is the go-to money manager. The brightest minds on Wall Street piggyback his trades. Just 43, he's a self-made billionaire who mixes bets on down-and-out investments with unnatural patience. No one has more faith in Eddie than Eddie. Which may explain why he's so comfortable leading Wall Street in the new world of high finance, one in which hedge funds like his and giant buyout firms are going toe-to-toe in the arena known as private equity. Lampert is part of the new breed of hedgies who have gone from passive investing to actively buying and managing firms to seek outsize returns.

Lampert's fund, ESL Investments, bought Kmart out of bankruptcy in 2003 and merged it with another stumbling retailer, Sears. Lampert sacked Sears' bosses and personally took charge of marketing and merchandising. He has made his missteps, but there have been ample successes too, and Sears' stock has surged from $15 to $140. Since founding his hedge fund in 1988, he has turned in average annual gains of about 30%, which trounces just about everyone else in the game.