It’s no secret that most descendants of Tiger Management Corp. founder Julian Robertson Jr. will thrive or die depending on whether the so-called TMT stocks (technology-media-telecommunications) continue to surge or slump.
As we pointed out earlier this month, in the first quarter of this year, a number of the so-called Tiger Cubs, Seeds and Grandcubs either trimmed or totally unloaded some of these high-flying stocks, but they still remain crowded in this group. Seven of the nine largest holdings among 50 funds analyzed by the New York research firm Novus were Facebook, Priceline Group, two different classes of Liberty Global, Google, 21st Century Fox and Charter Communications.
However, if other sectors — or markets — wind up overtaking these recent highfliers, which Tiger descendants are in the best position to stand out from the pack?
We analyzed Novus’s database of public global filings, including the first-quarter 13F filings for no fewer than 50 Tiger-affiliated firms, including Tiger Cubs, Tiger Seeds, Tiger Grandcubs and Tiger Management itself. Novus does not include in its analysis short positions or investments made in sovereign bonds, currencies, credit or other non-equity-related instruments.
Five funds stood out as having the most unique portfolios in the Tiger family tree. For all cases, the reason they stand nearly alone is that the bulk of their assets are not concentrated among the most popular bubble stocks, especially in the TMT group. Several firms are small, others are tilted to foreign stocks, while one of them specializes in health care.
The firm with the greatest number of stocks not held by other Tigers is Dallas-based Longhorn Capital Partners, a Seed founded in 2006 by Kristopher Kristynik and Philip Eckian. It had about $1.15 billion under management at the end of 2013.
At the end of Q1 2014, the firm had $278 million in total equity assets. However, of that sum, $242.5 million was invested in an exchange-traded fund that tracks the S&P 500 index.
Since Longhorn Capital had just $37 million or so invested in individual stocks, it is not too surprising that more than 84 percent of its single-stock portfolio was different from other Tiger managers. It shared just two stocks — Qualcomm and Campbell Soup Co. — with just four other Tiger funds.Longhorn’s two largest holdings are insurers: Travelers Cos.and Aon.
New York–based Tigershark Partners, one of Robertson’s first Seeds, founded in 2001 by Thomas Facciola and Michael Sears, also stands apart from other Tiger managers in 84 percent of its portfolio. However, Tigershark’s stock portfolio of $129 million was larger than Longhorn’s. Tigershark had some overlap with seven other funds, but just two stocks among its top ten are shared by several of the other Tiger-related funds — Teva Pharmaceutical Industries and Campbell Soup.
Many of its holdings are put or call options on a variety of major common stock positions. However, its largest unique common stock holdings include Johnson & Johnson, Molson Coors Brewing Co. and Quality Systems, which develops computer-based health records.
The third most atypical Tiger descendant, however, has a much more sizable stock portfolio. New York–based Deerfield Management Co., which specializes in health care, was founded in 1994 by Tiger Cub Arnold Snider and is currently headed by James E. Flynn, who has been with Deerfield since 2000. It had $3.8 billion under management at year-end and nearly $2.5 billion in U.S. equity assets at the end of the first quarter.
Just one of Deerfield’s top 12 holdings is also owned by another Tiger fund — Laboratory Corp. of America, which runs a clinical laboratory network. Altogether, Deerfield has a modest overlap with just 12 other firms, according to Novus. Deerfield’s top unique holdings include biotech companies Dendreon Corp. and InterMune; Flamel Technologies, a specialty pharmaceutical company; and two biopharmaceutical companies, Auxilium Pharmaceuticals and Dicerna Pharmaceuticals.
About 70 percent of the $1.8 billion portfolio of London-based Toscafund Asset Management is different from the other Tigers, according to Novus’s database. A major reason is that more than 60 percent of Toscafund’s holdings by assets come from sources outside of U.S. 13F filings. The firm was founded in 2000 by Martin Hughes, a former chairman of Tiger Management Europe.
Of Toscafund’s top ten holdings, only Citigroup — its largest position with 13 percent of assets — is shared by five other Tiger funds. Toscafund’s next nine largest stakes are unique to the Tiger universe, led by Daisy Group, a British telecom company; Redrow, a British homebuilder; Tullett Prebon, a London-based brokerage firm; and Findel, a British home shopping company.
The firm with the fifth most distinct portfolio is the little-known London-based Cub named Oceanic Investment Management, one of whose partners is Bjorn Rise, who was a global energy analyst for Tiger Management in New York. Oceanic is the only Tiger-related fund to hold three of the four largest positions in its $316 million portfolio — DHT Holdings, a crude oil tanker company; First Solar, a maker of photovoltaic modules; and Southwestern Energy Co., an oil and natural gas company.
And you thought Tiger Cubs were only about Google, Priceline and Facebook.
