Tiger Management

Tiger Management Corp., also known as "The Tiger Fund," was a hedge fund founded by Julian Robertson. The fund began investing in 1980 and was closed in March 2000.

History

Julian Robertson, a stock broker and former United States Navy officer, started Tiger Management in 1980 with $8 million in capital. By 1996, the fund’s assets had increased to $7.2 billion in value.^[1]

On April 1, 1996 BusinessWeek carried a cover story written by reporter Gary Weiss, called "Fall of the Wizard", that was critical of Robertson's performance and behavior as founder and manager of Tiger Management.^[1] Robertson subsequently sued Weiss and BusinessWeek for $1 billion for defamation. The suit was settled with no money changing hands and BusinessWeek standing by the substance of its reporting.^[2]

With $10.5 billion of assets under management in 1997, it was the second largest hedge fund in the world at the time.^[3] Its holdings climbed to $22 billion in 1998.

Tiger's largest equity holding at that time was U.S. Airways, whose troubles dragged down the value of his holdings. Such missteps ultimately led him to close his investment company in March 2000 and return all outside capital to investors. Tiger earlier made $2 bn in gains, but then it gave most of them back during a huge one-day move in the yen in 1998. In September 2001, Robertson distributed 24.8 million greatly devalued U.S. Airways shares over to former investors in Tiger. Robertson declared his intent to keep the stock.^[4] U.S. Airways declared bankruptcy in 2002, and shareholders in the airline were wiped out.^[5]

Aftermath and legacy

After closing his Tiger Fund in 2000, Robertson started to use his own capital, experience, and infrastructure to support and finance ("seed") upcoming hedge fund managers. As of September 2009, Robertson has helped launching 38 hedge funds ("Tiger Seeds") in return for a stake in their fund management companies. Apart from those Tiger Seeds, a considerable number of analysts and managers Robertson employed and mentored at Tiger Management went out on their own and are now running some of the best-known hedge fund firms, called "Tiger Cubs"^[6], run by Tiger alumni such as Lee Ainslie, Stephen Mandel, John Griffin, David Gerstenhaber (video portrait) and Paul Touradji.

"The modern-day emergence of hedge funds can be attributed to a 1986 article in the Institutional Investor highlighting the extraordinary returns of the Tiger Fund. The article spurred investor interest and financing; since that time, hedge funds have increasingly attracted investment and human capital."^[7]

The Wall Street Journal reported in June 2010 that Robertson is considering reopening his firm to outside investors. John Townsend, a former partner at Goldman Sachs, has been hired as the Chief Operating Officer, and Robertson's son Alex has also joined the firm. The new hires were part of a potential expansion that could involve creating a "seeding" fund or a fund of hedge funds for outside investors.^[8] According to Institutional Investor magazine, the timing may not be optimal, because this year many of the Tiger-seeded funds are struggling.^[9]

References

Notes

1. ^ ^{a b} Weiss, Gary (April 1, 1996). "Fall of the Wizard. Part 1" (Magazine article). Business Week. McGraw-Hill. http://www.businessweek.com/1996/14/b34691.htm. Retrieved November 11, 2009.  and "part 2". http://www.businessweek.com/1996/14/b34692.htm. 
2. ^
   • Associated Press (November 4, 1997). "Digital, corner newsstands go head-to-head: Question of timing in magazine publishing goes to court". The Fresno Bee: p. D14. 
   • Garigliano, Jeff (June 1, 1997). "Steep libel claims raise concerns". Folio: The Magazine for Magazine Management (Cowles Business Media Inc.): p. 19. http://www.highbeam.com/doc/1G1-19460270.html. 
   • Kelly, Keith J. (December 18, 1997). "Money Aside, Manager Settles Suit". New York Daily News: p. 78. 
   • New York Times (January 7, 1997). "Corrections". 
   • Reilly, Patrick M. (April 4, 1997). "Investor files papers signaling intent to sue Business Week for $1 billion". Wall Street Journal (Dow Jones). 
   • Wall Street Journal (December 18, 1997). "Business Week Agrees to Settle Libel Suit Brought by Investor". (Dow Jones). 
   • Pogrebin, Robin (November 3, 1997). "Publication Date Open to Dispute In Internet Age" (Newspaper article). New York Times. http://www.nytimes.com/1997/11/03/business/publication-date-open-to-dispute-in-internet-age.html?scp=1&sq=Publication%20Date%20Open%20to%20Dispute%20In%20Internet%20Age&st=cse. Retrieved November 11, 2009. 
   • Truell, Peter (December 18, 1997). "The Media Business; Investor Settles Libel Suit Against Business Week" (Newspaper article). New York Times. http://www.nytimes.com/1997/12/18/business/the-media-business-investor-settles-libel-suit-against-business-week.html?scp=1&sq=Investor%20Settles%20Libel%20Suit%20Against%20Business%20Week&st=cse. Retrieved November 11, 2009. 
3. ^ The Hedge Funds: The Rich Get a Little Richer — BusinessWeek
4. ^ "INVESTING: DIARY; Left Holding the Bag On US Airways Stock," By Laurence Zuckerman, Sept.23,2001 http://www.nytimes.com/2001/09/23/business/investing-diary-left-holding-the-bag-on-us-airways-stock.html
5. ^ "US Air files for bankruptcy: Airline gets OK for $75M in emergency financing; shareholders to be wiped out." CNN Money, Aug. 12, 2002 http://money.cnn.com/2002/08/11/news/companies/usair/
6. ^ http://www.opalesque.com/tiger - list of 38 Tiger Seeds and 32 Tiger Cubs
7. ^ Stephen M. Davidoff, Black Market Capital, 2008 Colum. Bus. L. Rev. 172 (2008) (citing Julie Rohrer, The Red-Hot World of Julian Robertson, Inst. Inv. 86-92 (May 1986)).
8. ^ "Tiger Sowing Seeds of Growth: Julian Robertson Weighs Reopening Firm to Outsiders a Decade After He Shut Fund," Wall Street Journal, July 21, 2010, http://online.wsj.com/article/SB10001424052748704723604575379563253539910.html?KEYWORDS=tiger+management Wall Street Journal
9. ^ "Tough Year for Tiger Cubs," Institutional Investor, July/August 2010, http://www.institutionalinvestor.com/alternatives/Articles/2635443/Tough-Year-for-Tiger-Cubs.html?p=1

Sources

• O’Keefe, Brian (January 28, 2008). "Tiger's Julian Robertson roars again" (Magazine article). Fortune. http://money.cnn.com/2008/01/28/news/newsmakers/okeefe_tiger.fortune/index.htm. Retrieved November 11, 2009. 
• Weiss, Gary (April 1, 1996). "Fall of the Wizard" (Magazine article). Business Week. McGraw-Hill. http://www.businessweek.com/1996/14/b34691.htm. Retrieved November 11, 2009. 

External links

• CNN Money archive — Tiger Management Closes
• Video: Julian Robertson on Tiger Cubs and Tiger Seeds (hedge funds financed by him) and his estates in New Zealand — Opalesque FIVE Minutes, 11/19/09