A report from Bloomberg said some of the investors of billionaire Eddie Lampert's hedge fund were not happy with the performance of Sears Holdings Corp. This was despite the 54% gain of the stock this year and the fact that it was the best performer among ESL Partners' US listed stocks. The report added that the increase in Sears contributed greatly to the 41% return posted by the hedge fund this year through November.

However, some clients who agreed on a five-year lockup with ESL Partners think that the returns were not satisfactory. In a regulatory filing, ESL Partners said it issued 7.42 million shares of Sears in order to meet client redemptions. The stake, which was valued at USD 471 million prior to the distributions, has since lost one-fifth of its worth, according to the report.

Sears has experienced sales declines for 27 straight quarters. In 2005, Lampert orchestrated the combination of Kmart Holding Corp and Sears, Roebuck & Co, but the retailer's performance has struggled since then. Although Lampert is still optimistic above Sears, saying this week that he is still concentrating on making long-term value for the retailer, some of his investors are not as positive.

University of Michigan Ross School of Business Professor Erik Gordon told Bloomberg, "Lampert's eternal optimism regarding Sears is not shared by a growing number of his investors, and with good reason after all these years."

When Lampert became the Chief Executive Officer of Sears in February, he gave Sears stock instead of cash to investors who were exiting the fund, which compelled him to surrender majority control of the retailer. Although the hedge fund industry rarely gives redemptions in kind, Lampert has done so various times when he paid investors who wanted to get their money with shares from the stakes he has in firms like AutoZone Inc and AutoNation Inc, the report said.