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Opalesque Exclusive: Julian Robertson reveals what makes a good hedge fund manager on Opalesque TV

Wednesday, November 18, 2009
By Benedicte Gravrand, Opalesque London:

Julian Robertson, a legend in the hedge fund world for having run a highly successful hedge fund for 20 years, is also known for having mentored some of the brightest in the field, now known as the “Tiger Cubs.” What is less known about him, though, is that after his fund closed in 2000, he seeded quite a few young sparks too. He revealed, in a video interview with Opalesque, the decisive factors for selecting managers – and many other things.

About the Tiger
Julian H. Robertson was born in 1932 in North Carolina, served as an officer in the U.S. Navy until 1957, then worked as a stock-broker. He later spent a year in New Zealand with his family to write a novel. When he returned in 1980, Robertson launched Tiger Management, one of the earliest hedge funds, and one that was to become a legend in the industry.

Robertson is credited with turning $8m in start-up capital from friends and family into $22bn in 1998, and performing returns of more than 20% net yearly for 20 years. He gathered the smartest stock-pickers on Wall Street to work on the fund – which closed in March 2000, when poor stock picking – a lesson about the smartest -, together with the shorting of technology stocks caused sharp losses and investor withdrawals.

Tiger Cubs
Many of the traders and managers Robertson employed and mentored at Tiger Management – the “Tiger Cubs” – are now running some of the best-known hedge fund firms. And a lot of them are part of the Tiger Foundation, a New York charity. Here is the list of the 32 cubs, supplied by Tiger Management:

  1. Argonaut Capital Management – David Gerstenhaber
  2. Blue Ridge Capital – John Griffin
  3. Bowman Capital Management – Lawrence Bowman
  4. Bridger Management – Roberto Mignone
  5. Coatue Capital Management – Philippe Laffont
  6. Deerfield Capital – Arnold Snider
  7. Discovery Capital Management – Rob Citrone
  8. Duff Capital Advisors – Philip Duff
  9. Elmwood Advisors – Quinn Riordan
  10. Healthcor – Arthur B Cohen
  11. Hoplite Capital – John Lykouretzos
  12. Impala Asset Management – Robert Bishop
  13. Intrepid Capital Management – Steve Shapiro
  14. Joho Capital – Robert Karr
  15. Lone Pine Capital – Stephen Mandel
  16. Longhorn Capital Partners – Kris Kristynik
  17. Maverick Capital – Lee Ainslie
  18. Millgate Capital – James Lyle
  19. North Sound Capital (Rolled into Duff Capital) – Tom McAuley
  20. Pantera Capital Management – Dan Morehead
  21. Ridgefield Capital Management – Robert Ellis
  22. Roundrock Capital Management – Peter Vig
  23. Second Curve Capital – Tom Brown
  24. Shumway Capital Partners -  Chris Shumway
  25. Speedwell – Fuyuki Fujiwara
  26. Sun Valley Gold – Peter Palmedo
  27. Suranya Capital Partners – Anu Murgai
  28. Toscafund – Martin Hughes
  29. Touradji Capital – Paul Touradji
  30. Valinor Management – David Gallo
  31. Viking Global Investors – Andreas Halvorsen
  32. Williamson McAree Investment Partners – Ed McAree & Robert Williamson

Tiger Seeds
Currently “retired,” Robertson manages his own money and also seeds smaller hedge funds. His net worth was enhanced over the years, and estimated by Forbes at $2.2bn in Sept-09.

“The Tiger Seeds are people that we have backed and we have a small piece of their company,” Robertson told Opalesque’s founder Matthias Knab in a recent video interview (here) in his Park Avenue offices. “And the Tiger cubs, most of them just went out on their own, having worked with me at Tiger.”

When shutting his fund in 2000, Robertson was left with a large, empty office space. He told Opalesque that he then persuaded three of his most successful analysts to stay. They were Robertson’s first seeding ventures – and turned out to be more successful than he had imaged.

He has seeded 38 funds so far:

  1. Axial Capital Institutional, LP - Marc Anderson / Eliav Assouline
  2. Apos Capital Partners, LP - Alok Agrawal
  3. Cascabel Scott. - Sinclair, Laurence Chang
  4. Catalpa - Joseph McAlinden
  5. DLH - David Henle
  6. ESG - Kevin Kenny
  7. ESG "Cross Border Equity" - Kevin Kenny
  8. Eastern Advisors - Scott Booth
  9. Fox Point Fund QP, LP - Charlie Andersen
  10. Goshen Global Equity, L.P. - Christopher J. Burn
  11. Green Eagle Credit Fund, LP - Glenn Migliozzi / Dan Sperrazza
  12. Hound Partners, LP 3 (c) (7) - Jonathan Auerbach
  13. Kelusa LP - RJ McCreary
  14. Lanexa Global Management - Ian Murray
  15. Longhorn Onshore investors - Kris Kristynik
  16. Long Oar Global Partners, LP - James Davidson
  17. Maple Leaf Partners, LP - Dane C. Andreeff
  18. Maple Leaf Discovery I, LP - Dane C. Andreeff
  19. Miura Global Partners II, LP - Pasco Alfaro / Richard Tumure
  20. Mojave Fund, LP - Michael Beebe
  21. North Oak Absolute Return Fund, LP - David Rockwell / Austin Root
  22. Pelagic Institutional, LP 3c7 - McAndrew Rudisill
  23. Pelagic Holdings, LP 3c1 - McAndrew Rudisill
  24. Sabretooth Onshore Fund, LP - Erez Kalir / Craig Perry
  25. Sun Valley Gold, LP - Peter Palmedo
  26. Teewinot Fund I - Michael J. Moriarty
  27. Tiger Asia - Bill Hwang
  28. Tiger Consumer - Pat McCormack
  29. Tiger Europe - Elena Piliptchak
  30. Tiger Eye Partners, LP - Ben Gambill
  31. Tiger Global, L.P - Chase Coleman
  32. Tiger Ratan Capital, LP - Nehal Chopra
  33. Tiger Shark - Tom Facciola
  34. Tiger Veda LP - Manish Chopra
  35. Touradji Global Resources Fund, LP - Paul Touradji
  36. Venesprie Capital Partners QP, LP - Quincy Fennebresque
  37. Wolfacre - Jon A. Ylvisaker
  38. WRA Investment Partners LP - Bill Araskog

Although there were no hints as to whether he had more in the pipeline, we learnt from WSJ.com shortly after that he was planning to seed a private-equity infrastructure firm led by Emil W. Henry Jr., a Lehman alumnus, which will be called Tiger Infrastructure Partners.

Talent, according to the Tiger
Robertson described his way to recognize and identify hedge fund talents during the video interview. “We have worked along some very successful hedge funds over the years,” he started. “There are certain traits that a lot of these people have and we have put all that information into a test that we give budding hedge funders.”

Indeed, Robertson uses state-of-the art, multi-dimensional profiling and psychological tests to indentify hedge fund talents, having worked closely with leading researchers from NY University.

The test assesses the managers’ honesty, intelligence, their ability to get along with their co-workers and their competitiveness. “Because we found that competitors are usually better hedge fund managers,” Robertson noted.

To be a good hedge fund manager, he said, you have to be “absolutely” honest, intelligent, competitive and be able to get along with a team.

“I can go beyond that,” he continued, “I think there is something strange in that the make-up of the most successful hedge fund people… [they] have a real interest in making this world a little bit better than it was when they got into it.”

Current positions
A sharp industry commentator, Robertson said when asked about his economic outlook in an interview with the FT last month: “I prefer to run scared through here. I think that if the Chinese stop buying our debt, it is virtually the end of the financial world as we know it. How likely is a Chinese boycott of American debt? The conventional thinking is that they will continue buying. But I don't think it's logical to assume somebody will continue to buy paper which declines in value. Our dollar is declining in value, and it's been pretty shocking over the last four or five months.”

At the New York Value Investing Congress, also last month, he said he was bullish on credit card companies, as well as the likes of Intel and Google, but would steer clear of gold as an inflation hedge, Reuters reported. He dismissed gold bugs as "certifiably crazy."

There’s more to the Tiger
Robertson is also an active philanthropist, and the founder and benefactor of the Robertson Scholars Program which awards a scholarship to 36 students each year. He is active as an investor and developer in New Zealand, where he spends much of his time and where he owns farms, golf courses and wineries.

To view Robertson talk about hedge fund managers’ profile, the Tiger Foundation, philanthropy, New Zealand, and golf on Opalesque TV, click here: Source

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Right, not all years were straight - only Madoff had that track record :-)

Here is more material: According to returns provided by Robertson exclusively to Fortune, he earned a stunning 76.7% return in 2007 managing a multi-billion-dollar portfolio of his own money. That rivals his best years running his flagship Tiger fund in the 1980s and 1990s, when he was an undisputed Master of the Hedge Fund Universe and grew Tiger from $8 million at its launch to over $22 billion at its peak in 1998.

Since he shut down the Tiger fund on March 30, 2000, according to the records provided to Fortune, Robertson has generated a total return for his own pool of capital of 403.7%.

Julian Robertson's `Tiger Cubs' Beat Hedge-Fund Rivals in 2007
http://www.bloomberg.com/apps/news?pid=20601087&sid=a.iQFhXn1DDE&refer=home Matthias Knab |   November 18, 2009 10:07:36 PM
didnt Robertson have a poor year performance wise in 2006 when he predicted a financial bubble one year early? Michael Doran |   November 18, 2009 09:51:05 PM
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