Tiger Cubs – List of Hedge Funds
While it is often cited that there are around thirty hedge funds that can be considered Tiger Cubs, more than 200 hedge funds trace their roots to Tiger Management, according to LCH Investments.
Not all the firms listed in the table below are so-called “first-generation” Tiger Cubs.
Certain firms are those with origins that trace back to Tiger Management, which are frequently called “Tiger Heritage”, “Grand Cub”, or “Second Generation” Tiger Cubs.
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- Intrepid Capital Management
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Learn More → Hedge Fund Quick Primer
Top Hedge Funds by AUM – Complete List of Firms
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What is the Investment Strategy of Tiger Management?
Julian Robertson’s Tiger Management employed a long/short investment strategy designed to profit from correctly picking the right stocks on which to take a long position and the worst stocks to short-sell.
Originally, the primary strategy was oriented around finding undervalued and overvalued stocks mispriced by the market, but the number of opportunities soon diminished as the firm’s AUM grew.
Around 1999, Robertson publicly acknowledged that his past strategy of picking undervalued stocks (”cheap” stocks) while shorting overvalued stocks was no longer as effective.
In the later stages of Robertson’s career, his firm began trading more frequently (e.g. betting on commodities) and investing in themes based on the global economy and political developments, an investing strategy often called “global macro”.
Julian Robertson Quote
“The mistake that we made was that we got too big.”
– Julian Robertson: A Tiger in the Land of Bulls and Bears (Source: Biography)
What is the Fund Strategy of Tiger Cubs?
Each of the Tiger Cubs led by proteges mentored by Robertson utilize their unique strategies, but one common theme is that they focus on performing in-depth diligence into a company’s fundamentals.
For instance, many Tiger Cubs are known for continuing the practice of highly-collaborative, time-consuming team meetings where potential investments are pitched and discussed internally among team members.
However, these meetings are specifically intended to encourage vigorous debates.
Once an investment proposal received the green light, Tiger Management took substantial bets on the position, even if it was highly speculative and risky, which the firm’s long-short strategy helped offset.
Robertson was also weary of the growing technology sector, and his refusal to invest in early dot-com companies was among the factors that ultimately led his firm to close.
However, many Tiger Cubs have since become leading technology-oriented investors, such as Tiger Global and Coatue.
One of Robertson’s unique traits, which many attribute to his long-term success, was his ability to recruit and hire the right employees and take care of their well-being so that they can perform well, i.e. encouraging physical health and promoting exercise.
In fact, Robertson attempted to establish a systematic method of recruiting through a psychoanalysis test consisting of 450 questions (and lasting 3+ hours), where the objective of the questions was to identify how the applicant thought about achieving returns in the stock market, risk management, and teamwork.
Like Robertson, many of his hires were considered hyper-competitive, with a track record of success in fields often unrelated to investing, as demonstrated by many former employees being college athletes.
Collapse of Archegos Capital – Bill Hwang
While Tiger Cubs are highly-regarded in the hedge fund industry, not all have fared well.
In fact, many of the firms stand accused of predatory short-selling, insider trading, and more.
In particular, Bill Hwang, the founder of Archegos Capital Management, saw his firm collapse in 2021, resulting in around $10 billion in total losses incurred by banks.
The collapse of Archegos prompted federal prosecutors to charge Bill Hwang with conspiracy to commit fraud and market manipulation.
