Lampert's potent force in investing branches into retailing

0 Comments | USA TODAY, November, 2004 | by David Lieberman

NEW YORK -- DreamWorks SKG co-founder David Geffen laughs when asked what it's like to invest with Edward Lampert, the hedge fund manager and Kmart chairman who startled the business world last week with Kmart's $11 billion deal to buy Sears.

"He doesn't make it easy," Geffen says.

Those who want to get into Lampert's ESL Investments fund have to put up at least $10 million. But then -- the hard part -- they have to forget about it for five years. For all that, Geffen says, "He doesn't stay in touch with clients at all."

But the legendary music executive doesn't regret his decision in 1991 to turn $200 million over to ESL. Its return on investment has averaged 30% a year, he says.

Lampert, 43, is "a workaholic, and he's as smart as they come. He's a...