Nehal Chopra has one of the hottest hands on Wall Street these days, not to mention among hedge fund firms with roots to Julian Robertson Jr.’s Tiger Management.
Chopra’s Tiger Ratan Capital Fund surged more than 11 percent in May alone and is up about 30 percent year-to-date.
The manager, who now runs more than $1.2 billion, is easily beating the Standard & Poor’s 500, which was up just 3.23 percent through May. The average hedge fund has risen less than 4 percent this year, according to widely followed databases including HFR and eVestment.
Several other funds with roots to Robertson are also enjoying a strong year so far, though none are soaring quite as high as Tiger Ratan.
Jonathan Auerbach’s New York–based Hound Partners was up 5.3 percent in May and 13.4 percent for the year.
Lee Ainslie III’s Dallas-based Maverick Fund climbed 5.25 percent last month. The Tiger Cub is up 11.55 percent for the year.
Greenwich, Connecticut–based Viking Global Equities, headed by O. Andreas Halvorsen, rose 2.2 percent last month and is up 5.5 percent for the year.
Benjamin Gambill’s New York–based Tiger Eye was up 2.1 percent in May, bringing its gain for the first five months to 4.6 percent.
Two Tiger-affiliated funds managed to move into the black with their May performance. We recently reported that New York–based Tiger Global was up 0.4 percent after gaining 2.8 percent last month. And Paul Hudson’s Glade Brook Global Offshore, based in Greenwich, Connecticut, jumped 2.8 percent last month and is now up 1.41 percent for the year.
However, none of these funds have come close to Tiger Ratan’s record over the past few years. The fund, based in the same building as Tiger Management, was up 22.3 percent last year, 46.8 percent in 2013 and 26.3 percent in 2012.
Before launching Tiger Ratan, Chopra worked at hedge fund firms Ramius Capital Group and Balyasny Asset Management.
Chopra is known for being a tough person to work with. She has even clashed with Robertson himself.
A Bloomberg profile published last year noted that Chopra has experienced a revolving door of chief financial officers and other key staff.
“I tend to be very involved in every idea, and that is never going to change,” she told Institutional Investor last year while discussing her lean organization. “If we get too big, I’ll end up becoming the bottleneck.”
Not many ideas wind up in her portfolio. Even by Tiger standards, Chopra runs a very concentrated portfolio.
At the end of the first quarter, her more than $711 million in U.S. equities was spread over just nine stocks.
Her two largest positions, high-profile acquisitive drug companies Valeant Pharmaceuticals International and Actavis, accounted for more than 45 percent of the portfolio.
But this concentration — specifically, her two largest investments — primarily explains her success.
Valeant, a big hedge fund favorite, was up 10 percent in May and 66 percent for the first five months of the year, while Actavis rose 8.5 percent last month and 19 percent for the year through May.
Kraft Foods Group, Chopra’s fourth-largest holding since Tiger Ratan took a new, sizable stake in the first quarter, is either a big winner or a slight loser, depending on when the stock was bought. The reason: The stock spiked by more than one third on March 25 after the Wall Street Journal reported that private equity firm 3G Capital was in discussions to acquire Kraft. That proved to be the case. Since the stock spiked, it has traded in a narrow range but drifted downward.
Charter Communications, Chopra’s third-largest holding, has also drifted down slightly since the cable company announced in late May that it plans to acquire Time Warner Cable. But it was up nearly 8 percent in the first five months of the year.
Pinnacle Foods, another position established in the first quarter, was up 20 percent in the first five months, but it is not known exactly when when the fund bought its shares of the food company best known for brands such as Birds Eye and Duncan Hines.
Two other new holdings have clearly not worked out yet. Telecom equipment company Zayo Group Holdings is near its lowest price since late November; Calpine, a power production company, is flat.
The two remaining stocks in Tiger Ratan’s portfolio at quarter-end were Endo International and Hilltop Holdings.
Endo, which sells generic pharmaceuticals and health care devices, was flat in May but up 15 percent for the first five months. To enjoy that return, however, you had to have bought the stock on one of the first days of the first quarter.
Hilltop, a Texas financial services company, was up nearly 9 percent in May alone and roughly 10 percent for the year.
