| O. Andreas Halvorsen, Viking Global Investors (Bloomberg) |
O. Andreas Halvorsen’s Viking Global Investors is widely admired as one of the most successful of the so-called Tiger Cubs, the descendants of Julian Robertson Jr.’s legendary hedge fund firm, Tiger Management Corp. The admiration is especially strong among Halvorsen’s former colleagues and other managers with ties to Tiger. In the second quarter, Greenwich, Connecticut-based Viking had among the most-emulated portfolios by the other Tiger Cubs, Seeds (those who received start-up capital from Robertson), Grandcubs (those who previously worked for Tiger Cubs) and other Tiger affiliates. The other most frequently imitated portfolios were those managed by New York-based Tiger Global Management and Greenwich, Connecticut-based JAT Capital Management.
These findings are based on Alpha’s analysis of New York-based research firm Novus’s database of public global regulatory filings of managers’ stock holdings, including the second-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.
Each quarter, Novus analyzes the 13F data to determine which Tiger descendants’ portfolios most resemble one another. It then ranks the individual Tiger funds that most resemble another Tiger fund. Of the top eight Tiger affiliate portfolio pairs with the highest percentage of overlap, three of them involved funds whose portfolios most overlap with Viking. In addition, four of the 18 most-overlapped portfolios are those that resemble JAT Capital, while three of the 15 most-emulated portfolios are those managed by Tiger Global. Tiger-affiliated managers have long been known to have similarities in their equity portfolios, and their holdings are widely watched — and sometimes imitated — by stock market investors.
Tiger Global, the New York firm founded by Charles (Chase) Coleman III and whose hedge funds are managed by Feroz Dewan, shows many similarities to SRS Investment Management. Nearly 66 percent of SRS’s portfolio is invested in securities also held by Tiger Global, according to publicly-available data. This is not very surprising, given that New York-based SRS was founded in 2007 by Karthik Ramakrishna Sarma, who worked for Tiger Global for five years.
Also, keep in mind that SRS runs a very concentrated portfolio. At the end of the second quarter, it had $2.4 billion in U.S. equities spread over just 15 names. And seven of them are also held by Tiger Global.
However, three of the seven stock holdings account for the bulk of the overlap: Auto rental giants Avis Budget Group and Hertz Global Holdings and Chinese Internet company Qihoo 360 Technology Co. And about 55 percent of SRS’s portfolio overlapped with JAT Capital — the Greenwich, Connecticut-based firm founded in late 2007 by John Thaler.
The second-most-overlapped pair also has closely tied roots. Nearly 56 percent of New York-based Falcon Edge Capital’s portfolio is invested in securities also held by John Griffin’s New York-based Blue Ridge Capital. Falcon Edge was founded in mid-2012 by Richard Gerson, a founding executive at Blue Ridge.
Interestingly, more than 37 percent of Blue Ridge’s portfolio overlaps with Falcon Edge’s. The two firms have 13 stocks in common. However, Falcon Edge’s three largest overlapped positions are much smaller portions in Blue Ridge’s portfolio — Cheniere Energy, which specializes in liquefied natural gas; SanDisk Corp., which specializes in flash memory storage; and Avis Budget Group, the auto rental giant.
The three funds that heavily overlap with Viking are John Lykouretzos’s New York-based Hoplite Capital Management, David Goel’s Waltham, Massachusetts-based Matrix Capital Management Co. and Philippe Laffont’s New York-based Coatue Management, according to Novus. For example, more than 53 percent of Hoplite’s portfolio is invested in securities held by Viking. However, just 34.3 percent of Viking’s portfolio is invested in securities held by Hoplite, according to the database. They have 15 stocks in common. Three of them are sizable holdings of both firms — Valeant Pharmaceuticals International, Walgreen Co. and Lowe’s.
Nearly 51 percent of Matrix’s portfolio is invested in securities held by Viking. However, Viking’s overlap with Matrix is just 29 percent, according to Novus. Interestingly, while software company Workday accounts for nearly 10 percent of Matrix’s portfolio, it accounts for less than 1 percent of Viking’s.
Nearly 51 percent of Coatue’s portfolio also overlaps with Viking’s. Yet just 15.2 percent of Viking’s portfolio is invested in securities held by Coatue, the Novus data shows.
Altogether just eight stocks overlap. Apple and Netflix combined account for nearly half of Coatue’s overlap with Viking. Yet they are very small holdings of Viking.
