| Photo credit: Bloomberg |
Hedge fund firms with some sort of ties to Julian Robertson Jr.’s Tiger Management continued to bet heavily on drug giant Allergan in the third quarter, new research shows.
Twenty of 46 Tiger-related hedge fund firms held the stock as of September 30, making it the most widely held stock among this crowd for the second straight quarter, according to New York–based Novus Partners, a portfolio intelligence firm that, among other things, analyzes the quarterly filings of hedge funds. (Actavis, which changed its name to Allergan after the two companies merged earlier in the year, was the largest holding among Tiger funds at the end of the first quarter.)
This is a departure from their non-Tiger hedge fund brethren, who aggressively bailed out of the stock in the most recent quarter. While Goldman Sachs noted in its own quarterly analysis of hedge fund holdings that Allergan was the third-most-widely held stock among all hedge funds at the end of the second quarter, at the end of the third quarter, Allergan did not even rank among the top 50 most popular hedge fund stocks.
After months of takeover rumors within the consolidating drug and health care industries, in late November New York–based Pfizer announced that it would acquire Dublin-based Allergan for $160 billion. Actavis completed its acquisition of Allergan in March 2015. Allergan is up more than 12 percent since the beginning of October after falling more than 9 percent in the third quarter.
The Tiger-related funds Novus tracks include firms headed by a Tiger Cub (meaning the individual previously worked for Robertson), so-called Tiger Grandcubs (who previously worked for a Cub) and Tiger Seeds, who received an investment from Tiger Management in return for some sort of ownership stake. Novus also includes Tiger Management itself.
Allergan is the largest holding of two Tiger Cubs: Greenwich, Connecticut–based Viking Global Investors, the eighth-largest shareholder, and New York–based Blue Ridge Capital. It is also the fifth-largest position of New York–based Tiger Seed Ratan Capital Management.
In the third quarter two Tiger-related funds established new stakes in Allergan: South Norwalk, Connecticut–based Discovery Capital Management and New York–based HealthCor Management. Two funds exited the stock, 12 added to their position, and six reduced their stake.
Allergan is not the only example of how the Tiger crowd parted from the rest of the hedge fund community. At the end of the third quarter, just three stocks can be found among the most widely held rankings of both the Tiger-related funds and all hedge funds tracked by Goldman.
They are Facebook, Alphabet (Google) and Amazon.com.
Facebook is the second-most-popular stock among Tiger-affiliated firms, with 18 investors, and the third overall with 149 investors.
It is a top ten holding of Greenwich, Connecticut–based Lone Pine Capital, San Francisco–based Valiant Capital Management, New York–based Falcon Edge Capital and Greenwich, Connecticut–based Glade Brook Capital Partners.
Alphabet is the fifth-most-popular Tiger stock, with 15 investors, and the second-most-popular stock among all hedge funds, with 151 investors.
Interestingly, the Tiger funds prefer the nonvoting class-C shares of Alphabet, while the hedge fund crowd in general prefers the class-A shares.
At the end of the third quarter, Alphabet was the third-largest holding of Viking and also of Lee Ainslie III’s Dallas-based Maverick Capital.
Here are the 14 most popular stocks among the Tiger-related funds as of September 30, according to Novus:
Allergan 20
Facebook 18
Charter Communications 16
JD.com 16
Alphabet 15
Fleetcor Technologies 14
Netflix 13
Amazon.com 12
Priceline Group 12
Valeant Pharmaceuticals International 11
Walgreens Boots Alliance 11
Transdigm Group 11
Liberty Global 10
Alphabet 9
