Another hedge fund firm with ties to Julian Robertson Jr.’s legendary Tiger Management Corp. is shutting down.
New York–based TigerShark Management, co-founded by Thomas Facciola and Michael Sears in February 2001, is returning what amounts to only $100 million or so to clients, a paltry sum given its 14-year history, according to published reports.
This is the fourth so-called Tiger Cub (firms whose founders worked for Tiger Management) or Tiger Seed (firms that received start-up capital from Robertson) to close down since the beginning of 2014. Even more significantly, it is the third of the initial class of five Tiger Seeds launched in 2000 and 2001 to shut down.
In March, Patrick McCormack’s Tiger Consumer Management announced it would close down its fund, which was managing $2.2 billion at the end of 2013. By the end of last year, its U.S. stock portfolio had nearly $1.4 billion.
In 2012, Bill Hwang closed Tiger Asia Management amid investigations into insider trading. Six years after landing in the U.S., Hwang, who prefers to go by his adopted American name rather than his Korean name, Sung-Kook, graduated from the University of California, Los Angeles, and then received his MBA from Carnegie Mellon University.
Hwang worked as a broker at Hyundai Securities Co., where he met an analyst with Tiger Management and eventually struck up a relationship with Robertson. The Tiger founder later hired Hwang to help navigate the South Korean market, which Robertson thought was undervalued. After Tiger was shuttered, Hwang’s became one of the first funds to be seeded by Robertson.
Through 2007, Tiger Asia racked up a compounded annualized return of about 40 percent. At the end of 2007, Hwang had about $8 billion under management.
As financial markets started to crumble in 2008 amid concerns over subprime mortgages, Tiger Asia was actually in positive territory as late as August of that year. But Hwang’s portfolio was positioned for market gains that year, and when markets plummeted, he finished the year down 23 percent.
In December 2013 a Hong Kong court ordered Hwang, Tiger Asia and one of its officers to pay $5.8 million stemming from insider trading charges, according to reports at the time. The hedge fund firm had admitted to using inside information on two different occasions in late 2008 and early 2009 to trade the shares of two Chinese banks, according to the reports. These and charges from regulators in other countries forced Hwang to shut his firm in late 2012.
Other recent Tiger-related funds — but not Tiger Seeds — to close include Scout Capital Management, headed by Adam Weiss and James Crichton, and Joho Capital, founded by Robert Karr, both of which shut down in 2014.
The only two of the original Tiger Seeds to remain in operation are J. Kevin Kenny Jr.’s Emerging Sovereign Group and Charles (Chase) Coleman III’s Tiger Global Management.
In 2011 private equity firm the Carlyle Group bought a 55 percent stake in Emerging Sovereign Group. Coleman, of course, is one of the most successful managers in general to emerge from the Tiger den. He now manages more than $20 billion, including $10 billion in hedge funds and long-only funds. He is also one of the best-performing hedge fund managers of the past few years.
Facciola, a Staten Island native, and Sears worked stints at Salomon Brothers — where Facciola was a First Team II All-America Research member covering financial companies — and Lehman Brothers Holdings before they joined Tiger in 2000 to work on its hedge funds, which ultimately shut down that year.
Facciola told me in an interview for a December 2002 Institutional Investor cover story highlighting the original five Tiger Seeds that he earlier had turned down a job offer from Robertson in the mid-1990s. “I was not ready for the buy side,” he said at the time.
He and Sears launched TigerShark in 2001, specializing in banks and financial stocks. It finished that year up 38 percent and was running $185 million by the end of 2002. In 2010 it was managing about $260 million.
