Business Context and Reporting Period
This Form 8-K is a Regulation FD disclosure filed by Greenlight Capital Re, Ltd. on January 20, 2009. The filing disseminates information provided by David Einhorn, Chairman of the Board and President of Greenlight Capital, Inc., regarding the investment activities of the "Greenlight Accounts" managed by DME Advisors, LP, which serves as the exclusive investment advisor to the Company.
Key Financial Metrics
- Total Assets Under Management (GLRE): Approximately $588 million invested in securities, commodities, and cash/cash equivalents as of December 31, 2008.
- Portfolio Composition (as of Jan 20, 2009): 68% long and 35% short (excluding credit default swaps, gold, and currency exposures).
- Recent Performance: The managed account reported an estimated investment return of (0.6)% net of fees and expenses for the period from January 1, 2009, through January 20, 2009.
Material Changes and Portfolio Activity
During the fourth quarter of 2008, the Greenlight Accounts added significant long positions in the following securities and assets:
- Allegheny Energy (AYE)
- Commscope (CTV)
- MEMC Electronic Materials (WFR)
- Gold (GLD)
- Index of gold miners (GDX)
- Various bank loans, bonds, and convertible bonds
The filing does not provide comparative financial data for the prior year or specific revenue, profit, or debt figures for the Company itself, as this report focuses on portfolio composition and recent trading activity.
Outlook, Risks, and Management Commentary
Management commentary is limited to the disclosure of recent trading activity and the short-term performance metric for the first 20 days of 2009. The filing explicitly states that the information is furnished for Regulation FD compliance and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, nor subject to the liability of that section. No forward-looking guidance or specific risk factors beyond the inherent risks of the disclosed positions are detailed in this text.
Key Facts for Investor Verification
- Verify the current market value of the disclosed long positions (AYE, CTV, WFR, GLD, GDX) given the volatility of the 2009 market environment.
- Confirm the exact net asset value (NAV) of GLRE as of the most recent quarter-end, as the $588 million figure is from December 31, 2008.
- Review the specific terms and credit quality of the "various bank loans, bonds and convertible bonds" purchased in Q4 2008.
- Monitor the impact of the 35% short position exposure on the portfolio's performance during periods of market recovery.