Greenlight's Einhorn rules out going public

By Lilla Zuill

NEW YORK (Reuters) - Greenlight Capital Inc, a $5.5 billion New York-based hedge fund, said it has no plans to tap outside investors as some of its peers have done recently with initial public offerings.

"It would not be a good strategy for Greenlight," President David Einhorn said on Monday at the Reuters Investment Outlook 2008 Summit in New York.

Einhorn added that selling a stake in the hedge fund -- either to the public or an outside investor -- would reduce flexibility at Greenlight, a small shop compared to others in its sector with a total head count of 20 people.

"First of all if you take in an equity partner that is not part of the work force you have a responsibility to grow equity," Einhorn said.

He added that as a private company Greenlight can choose how it wants to grow, and at what pace. He also has more flexibility to decide how compensation is meted out, he said, without the hassle of worrying about pleasing outside investors first. And so far Greenlight Capital employees have not griped about compensation, he added.

Einhorn's plan to stay private runs counter to that of a growing number of U.S.-based alternative asset managers such as Fortress Investment Group (FIG.N: Quote, Profile, Research, Stock Buzz) and Och-Ziff Capital Management (OZM.N: Quote, Profile, Research, Stock Buzz) which have recently floated shares, citing the benefits of access to capital markets, and the added employee perk of publicly traded stock and options.

BETTING MAN

Based on the performance of hedge funds that have recently sold stakes to the public, Einhorn -- who famously stumbled with his involvement in now-bankrupt subprime mortgage lender New Century Financial Corp. and who professed to having little free time this year to indulge his passion for bridge tournaments and occasional poker matches -- may have made a better bet by keeping Greenlight in private hands.  Continued...