Philippe Laffont, the founder of New York-based hedge fund firm Coatue Management, is the latest so-called Tiger Cub to launch a long-only fund.
Laffont’s firm recently raised $45.5 million for the Coatue Long Only Partners fund in its first sale, which closed May 1, according to a regulatory filing. Tiger Cubs were employed by Julian Robertson Jr. at his Tiger Management Corp. hedge fund firm.
This is the second new fund Laffont has launched this year. On February 1 he raised $270 million in the Coatue Hybrid Fund I and an offshore feeder fund. Laffont, who managed $6 billion at year-end, ranked No. 17 on the most recent Institutional Investor’s Alpha Rich List after earning $280 million in 2012. He earned $110 million in 2011, his first year on the annual ranking of the highest-earning hedge fund managers. Last year his long-short hedge fund rose 17 percent.
Other Tiger Cubs who run long-only funds include O. Andreas Halvorsen, Stephen Mandel Jr. and Lee Ainslie. Halvorsen’s Viking Global Investors ran $19.4 billion at year-end, including the $3.4 billion in Viking Long Fund. Mandel’s Lone Cascade, a long-only fund, managed $14 billion at the beginning of the year, compared with $8 billion in the long-short funds. And long-only funds comprise $700 million of the $9 billion in total assets under management at Ainslie’s Maverick Capital Management.
Coatue does not disclose its fees in the regulatory disclosure. All the other Cubs who offer long-only funds charge a management fee but have various performance fee structures. For example, Viking charges 20 percent for investors with a one-year lockup and 17.5 percent for investors with a three-year lockup in excess of the net return over the performance of the MSCI World Index. Lone Pine Capital charges between 10 and 20 percent over an unspecified hurdle. Maverick charges a performance fee calculated on the excess of performance over an unspecified hurdle rate.
Laffont launched Coatue in 1999, naming it after a long barrier beach on Nantucket, Massachusetts, where he has spent summers for the past 30 years. He earned both his B.S. and M.S. in computer science from Massachusetts Institute of Technology and worked as an analyst at Tiger Management in the 1990s.
Laffont is partial to concentrated positions primarily in technology, Internet and media stocks. At the end of the first quarter, his largest holdings in his $8 billion equity portfolio were in Equinix, which provides data center services, followed by media giants Time Warner, CBS Corp., Virgin Media and Liberty Global. He also nearly doubled his stake in Apple to 1.2 million shares from nearly 643,000 at year-end, making it his sixth-largest holding. In March 2013, Laffont told Bloomberg TV he thought Apple was “cheap by any measure” and that Google could triple over the next five to seven years. Even so, Google was only his ninth-largest holding at the end of March.
