Edward “Eddie” Lampert is a hedge fund heavyweight who has benefited from the tutelage of billionaires and the experience of learning how to work hard at a young age. Lampert has been able to use trials throughout life as a catalyst to better himself, continuing to solve problems and work his way to tremendous success and fortune.
Early Life and Education
Lampert was born in 1962 and raised in New York by his mother, a housewife, and his father, who served as the senior partner at Lampert & Lampert in New York City. Lampert maintained close ties with his grandmother, regularly sitting with her while she watched Louis Rukeyser’s "Wall Street Week" show. It was Lampert’s grandmother who first instilled in him an interest in investing. Lampert would review and evaluate the stock picks that his grandmother, a fairly passive investor, made each week, by reading through the financial newspapers.
Lampert’s first tragedy came in his early teens when his father passed away. Lampert assumed responsibility as the man of the house, taking jobs after school and during the weekend. Despite stocking shelves and filling orders during this time, Lampert maintained excellent grades throughout high school, and he was an accomplished basketball and soccer player. After receiving the scholar-athlete award upon graduating high school, Lampert received financial aid and was accepted to Yale. Lampert graduated from the university in 1984, summa cum laude, with a bachelor’s degree in economics.
Following graduation from college, Lampert got a job as an intern at Goldman Sachs. Starting in 1985, Lampert moved to the risk arbitrage department of the firm. During this time, he worked directly alongside Robert Rubin and Daniel Och.
Despite warnings from Rubin that it would be a mistake, Lampert decided to go out on his own in 1988, forming ESL Investments, based in Connecticut. Lampert received nearly $30 million seed capital from Richard Rainwater to fund his firm. He was also introduced to several clients by his benefactor, including entertainment mogul David Geffen. ESL Investments began providing investors with approximate yearly returns of 25%. As profits grew, Lampert’s firm began attracting attention, and he became known as a man who could locate and build opportunities out of stocks and other investments that most others failed to capitalize on.
Another large portion of Lampert’s success has lain, historically, in the vast amounts of Kmart and Sears shares he acquired. Beginning in 2003, Lampert starting picking up large amounts of Kmart shares as the discount retail company was distressed and had no potential to regain the portion of the market that had been swallowed up by competitors.
In a bizarre and shocking turn of events, Lampert was actually kidnapped in the week preceding his K-mart reorganization. According to a profile of the billionaire hedge-fund manager in Vanity Fair, leaving work in Greenwich on a Friday, Lampert was thrown in the back of a rented black Ford Expedition SUV, blind-folded, handcuffed, and driven to a Days Inn in Hamden, Ct, 55 miles east. There he spent a long weekend, negotiating with his kidnappers, who claimed they had been offered $3 million by AutoZone officials to murder him (one of his most successful investments). They eventually settled on $5 million, at which point his kidnappers drove him back to Greenwich and released him on a highway off-ramp to go and retrieve the money. Instead, Lampert walked a half-mile to the Greenwich police-station, and reported the incident. (No, yeah, you read that right). They men were arrested shortly thereafter.
In 2004, Lampert repeated the K-mart formula with shares of Sears. Lampert was successfully able to merge the former competitors in 2005, and the newly formed corporation, Sears Holding Company (NASDAQ: SHLD), became the third-largest retail chain in the United States. In 2013, Lampert took over as the chief executive officer (CEO) of the company after Louis D’Ambrosio stepped down.
In 2006, following the massive merger of Kmart and Sears, Lampert was featured on the Times 100 list of influential billionaires, and was noted as the richest man in Connecticut, with an approximate net worth of nearly $4 billion. As in-store sales at Kmart and Sears stores started to drop, Lampert’s net worth did as well. In 2012, Lampert was worth an approximated $3.1 billion. As of 2015, he is worth under $2.5 billion.
Quotable Lampert Quotes
“If you're unwilling to try new things and to fail and learn, you don't have a shot. That doesn't mean you are going to be successful, but you have to try to change.” Lampert faced a huge amount of skepticism regarding his ability to accomplish the task of merging Kmart and Sears, and he received widespread skepticism over how successful this merger would be. Further than that, Lampert stands by these words despite lags in profitability from in-store sales at retail locations bearing both names, as well as through ups and downs in the markets.
“The entrance strategy is actually more important than the exit strategy.” Despite Lampert’s willingness to take risks and fail, he strives to be a prudent investor with a strategic approach to all of his dealings and investments.