Billionaire Investor Bets on Housing’s Bottom

Well-known hedge-fund manager Edward S. Lampert is betting on housing’s bottom, piling into investments ranging from home improvement retail to mortgage origination and servicing, according to a published report on Thursday. Lampert’s ESL Investments Inc., which controls roughly $11.6 billion in investments, recently began picking up shares in some of the housing and mortgage sectors hardest-hit stocks. The Wall Street Journal first reported on the purchases Thursday morning. The Journal reported that ESL recently acquired small stakes in home builders Centex Corp. (CTX) and KB Home (KBH) — small meaning roughly $10 million each. The hedge fund also holds $35.5 million in troubled lender CIT Group Inc. (CIT), as well as $25.2 million in PHH Corp. (PHH). ESL press representatives have not commented to the press on the company’s outlook towards housing and mortgages, but it’s pretty clear that Lampert feels that at least the stock prices of certain key industry players have priced in much of the turmoil, even if we may have a ways to go before the housing market actually turns around. Disclosure: The author held no positions of relevance to this story when it was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.