Tiger Management was founded by Julian Robertson in 1980. It was one of the most successful hedge funds until the dotcom era. Robertson closed the fund in 2000 and it later restarted its work as Tiger Management LLC. It is currently managed by Michael Rosenberg. Tiger Management Portfolio Stocks now encompass two holdings, with an AUM of $5.5 million.
The only two holdings that are a part of Tiger Management’s portfolio include Coupang Inc and Maplebear Inc. Both of the companies come from the Consumer Discretionary sector.
In this article, we will encompass the first two decades of Julian Robertson Tiger Management’s rise to greatness. This will include Robertson’s performance analysis and investment strategy. We will also take a look at the current state of things in this “new” Tiger Management and its portfolio. Also, be advised to separate Tiger Management from Tiger Global, managed by Chase Coleman.
Top Holdings
- Maplebear Inc (NASDAQ:CART) with 73.31% of the portfolio
Tiger Management started trading Maplebear Inc. stocks in Q3 2023 when they bought 173,670 stocks at $29.69. The stock price rose from February 2024 to a current value of $36. The current value of this holding is $4.1 million.
- Coupang Inc (NYSE:CPNG) with 26.69% of the portfolio
Coupang is a new holding that Tiger Management acquired in late 2024. They bought 92 thousand shares at $16.50. Since then the price saw an increase to a current $17.60. The fund invested $1.51 million in this holding, while its current value is $1.61 million.
Key Sector
The entire portfolio of Tiger Investments is concentrated in Consumer Discretionary companies. Both Coupang and Maplebear are e-commerce companies. Coupang is registered in both South Korea and the United States, but it serves as a big e-commerce player in South Korea.
Maplebear serves the markets of the United States and Canada. It works as an e-commerce grocery shopping and food delivery company.
Current Tiger Management Portfolio Performance
From the available data, Tiger Management generated 51.72% returns in the last decade. In the last three years, performance went down, ending with an overall loss of 8.52%. In 2023 the fund reported a rebound with a 26.43% return.
How Julian Robertson Built a Successful Tiger Management Portfolio
Julian Robertson was a hedge fund manager who launched Tiger Management in 1980. Between 1980 and 1998 it was one of the hedge funds with the highest annual returns. The success of Julian Robertson’s portfolio was influenced by his disciplined investment approach.
He devised his strategy based on his experience and preference and it constantly delivered top returns. He focused his approach on these elements:
- Emphasis on the fundamentals. He conducted a strong fundamental analysis of companies. He looked for good management teams, high cash flow, and potential for growth
- Paying the right price. Although he would often look for undervalued assets, he was willing to pay the right and fair price if the company was good. His investment targets were often top in their sectors and had all the chances for long-term success
- Short bets. Besides long-term investment goals, Robertson also made frequent short-term bets. He aimed to profit off overvalued companies, and it brought another dimension to his investment strategy
- Surrounding himself with ethical and experienced individuals. He carefully chooses who he will work with. He preferred professionals that both have practical knowledge and qualities, and soft skills.
Robertson’s investment philosophy revolved around understanding the market and the industries. Once the tech industries started to develop in the late 90s he couldn’t catch up with them. He admitted that he didn’t fully understand that new trend, and it showed in the low performance of the fund.
Once he saw that he couldn’t properly compete in the market he decided to close up the fund. He did it in 2000, but he stayed in the industry. He continued to support new hedge funds with seed money and advice.
Julian Robertson led Tiger Management to become one of the most successful hedge funds which earned him the nickname “Wizard of Wall Street”. He died in 2022 and besides his hedge fund work, he was remembered for his mentor work.
Through it, he educated many later successful hedge fund managers who were known as Tiger Cubs.
Julian Robertson Investment Approach
Back in the day, Robertson garnered respect for his long-term approach and success in finding undervalued companies. Cornerstones of his strategy include a long-term investment horizon, diversification of the portfolio, focus on quality companies, and going against the herd. Also, he was known for taking both long and short positions in stocks trying to profit from both rising and falling prices.
But, when talking about his investment approach we must start with his focus on long-term success. He had a reputation as a disciplined investor who was willing to wait out the investment. After he identified an undervalued company with a growth potential he would sometimes ignore current high volatility.
He preferred to invest in different asset classes and industries as a risk-mitigating strategy. His wide knowledge of different industries helped him in research for the right firms in different sectors. His ability to identify current trends allowed him to position himself in the right companies that would often grow to become leaders in the industry.
Although he looked for companies trading below their intrinsic value he still chose to invest in strong companies. He would wait out until the market would undervaluate them, and then he went in. To know where to look he would go through the company’s fundamentals, and look for factors like capable management, competitive advantage, and innovation potential.
Julian Robertson’s investment strategy would be so successful if he didn’t often choose contrarian positions. He would often go for sectors and investments that were not very popular at the time. That gave him some breathing space and time to choose the right investments.
Julian Robertson Performance Analysis
Historical Portfolio Performance
The Julian Robertson portfolio generated annual returns of 31.7 between 1980 and 1998, which proved to be one of the most impressive feats in the hedge funds industry. In the same time frame, the S&P 500 index generated annual returns of just 12.7%.
In the late 90s, he could deal with new trends, including dot com, and in that period the returns plummeted. In 1998 the fund generated a loss of 4%, and a year later 19%. Just around that period, he admitted that he had trouble understanding the stock market, and he soon after closed his hedge fund.
Notable Success
- Investing in early-stage Biotechnology. Robertson was one of the first investors who recognized the potential in this sector. He invested in healthcare companies like Amgen and Genentech which brought significant innovations in the healthcare sector
- Success on the macro level. He had a wide and deep understanding of global trends which allowed him to bet on them. He would then reap the benefits from currency movements, or changes in the interest rates.
- Investments into large-cap companies. Previous choices to invest in Google, Apple, and Mastercard brought significant returns.
Notable Failure
- The bad bet on the US Air. In the mid-90s, Julian Robertson had a lot of confidence in at the time a major airline. He saw a trend of buybacks of stocks from the company and he bought almost a quarter of all stocks. But, the company struggled and filed for bankruptcy protection twice, in 2002 and 2004. And that was one of the reasons for the closure of the fund in 2000.
- Missing out on the dotcom boom. He called the boom of the tech industry in the late 90s a Ponzi pyramid destined for collapse. His American hedge fund went from $22 billion AUM in 1999 to just $6 billion, and missing out on the tech companies was one of the reasons.
- Massive loss on the Japanese yen. In 1998 Robertson was heavily invested in a short bet against the yen. But in late 1998 yen abruptly gained value resulting in $2 billion losses for Robertson in just one day.
Risk Management
Julian Roberson’s investment strategy was heavily reliant on risk management. If his investment proved to be a bad judgment, he would quickly exit the position to minimize the losses. Also, he often conducted stress tests, through which he tested how all holdings would handle a 10% loss.
His investing approach was based on diversification among different asset classes, and all around the globe. This also worked as a risk management strategy, because he would rarely keep a solid part of his portfolio exposed to the same risks.
FAQs
What is a Tiger Cub investing?
Tiger Cub investing is a term for investing with hedge funds led by portfolio managers who started working under Julian Robertson. They all shared a similar investing vision that revolved around the same group of goals.
Like Julian Robertson, his disciples were focused on companies’ fundamentals, they looked for long-term gains and used different strategies, like growth stocks or value investing.
How Big is Tiger Management?
The current AUM of Tiger Management is $5.5 million. In the late 90s at its peak, it had over $20 billion in AUM.
Final Thoughts
When talking about groundbreaking contributions in the field of investment, there are only a handful of names worth mentioning. Julian Robertson was one of them. His bold approach which was defined by diversified strategies, managed to generate above-average returns for two decades.
He knew almost everything about global markets and trends, and he didn’t limit himself to one or two strategies. He managed to achieve superb results both in short-term and long-term investments, and his approach to risk management always managed to keep him afloat. His legacy is still alive through several top managers active in the hedge fund industry which he had taken under his wing.
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