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FORTUNE -- Not all Wall Streeters are being forced to clip coupons or go without a dishwasher this year. Last week, Eddie Lampert and his family closed on a $40 million home on a private island outside of Miami. The 17,000 square-foot mansion on 2.7 acres has an "arrival court" with a long white driveway that leads you around formal hedges (not the financial kind) and a reflection pool to the front door. It's nice.
The purchase, which will be the most expensive home bought in Dade County since 2006, may come as a surprise to anyone who followed Lampert in 2011, which wasn't kind to the hedge funder. Lampert's most public holding, Sears (SHLD), of which he and his funds own 60% and is also the chairman, took a beating. The retailer closed 120 stores and lost $2.4 billion in the fourth quarter of last year. Other holdings were down as well. Overall, Lampert's largest fund ESL Investments reportedly lost 14% last year. Given his apparent screw up in Sears, some questioned whether Lampert, a storied value investor, had lost his touch.
Lately, though, Lampert has been on a hot streak. Hedge fund tracking website Insider Monkey recently ranked Lampert's fund the best performing of the year, though that was only based on publicly available holdings. Still, the seven largest holdings in Lampert's fund are up 30% in 2012, according to Insider Monkey. That compares to a 6.75% return for the Standard & Poors 500 in the same time.
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