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Sears Holdings: An affordable hedge fund

Date: Monday, January 22, 2007
Author: Marketwatch.com

As the debate carries on about whether Sears Roebuck and Kmart stores' parent Sears Holdings Corp. is a retailer or an investment vehicle attempting to mimic Warren Buffett's Berkshire Hathaway, a bigger question looms: Who cares? Sears Holdings Chief Executive Edward Lampert is regarded as one of the top five hedge-fund managers in the United States. He has a stellar track record with an average annual return of about 29%, before fees, since he went out on his own with ESL Investments in 1988. In 2005, he became the first hedge-fund manager ever to breach the USD1 billion mark in income, according to Alpha magazine. If Lampert can generate returns anywhere approaching that by turning the retail behemoth's heavy cash flow into yet more money, then why not, argues Credit Suisse analyst Bill Dreher. Complete story: