They may not have worked together for the past eight years, but former partners Jonathan Auerbach and Scott McLellan apparently continue to think alike.
Of all the hedge fund managers with some sort of roots in Julian Robertson Jr.’s Tiger Management Corp., Auerbach’s and McLellan’s portfolios contain the most similarities, according to an analysis published by New York–based research firm Novus. Auerbach co-founded New York–based Hound Partners with McLellan in 2004 while working at Tiger Management. In 2007, McLellan left to launch New York–based Marble Arch Investments with Tiger alumnus Timothy Jenkins.
At year-end nearly 67 percent of Marble Arch’s portfolio was invested in securities also held by Hound, according to Novus. This is the greatest overlap among all pairs of Tiger-related funds. What’s more, nearly 53 percent of Hound’s portfolio was invested in securities held by Marble Arch, the fifth-greatest overlap, according to Novus’s data. Altogether, the two firms have nine stocks in common.
For example, Valeant Pharmaceuticals International accounted for 14.9 percent of Marble Arch’s portfolio and 8.6 percent of Hound’s. Eight other Tiger-related funds also own the stock. Fleetcor Technologies, which provides various kinds of payment cards for businesses, is another important stock for the two former partners. It accounts for 11.9 percent of Marble Arch’s portfolio and 6.4 percent of Hound’s.
On the other hand, Spirit AeroSystems Holdings, a maker of aerostructures, is Hound’s biggest position shared with Marble Arch, accounting for 11.4 percent of Hound’s portfolio. However, it accounts for just 2.3 percent of Marble Arch’s assets.
These findings are based on Alpha’s analysis of Novus’s database of public global filings, including the fourth-quarter 13F filings for nearly 50 Tiger-affiliated firms, including Tiger Cubs (whose founders worked at Tiger Management), Tiger Seeds (which received start-up capital from Robertson), Tiger Grandcubs (who worked for Tiger Cubs) 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.
Of the top 13 most overlapping portfolios, Stephen Mandel Jr.’s Greenwich, Connecticut–based Lone Pine Capital and Charles (Chase) Coleman III’s Feroz Dewan’s New York–based Tiger Global Management are the two hedge fund firms most emulated. Each has three different Tiger-related funds with 46 percent or more of their assets invested in Lone Pine’s or Tiger Global’s securities.
For example, nearly 53 percent of Marble Arch’s portfolio is invested in securities held by Lone Pine, 52.2 percent of Greenwich, Connecticut–based Glade Brook Capital Partners’ portfolio is invested in securities held by Lone Pine and nearly 49 percent of Conatus Capital Management’s portfolio is invested in Lone Pine holdings. Greenwich, Connecticut–based Conatus was founded in 2007 by David Stemerman, a Tiger Grandcub because he previously worked for Lone Pine.
The three firms that have a large overlap with Tiger Global are three small Tiger Seeds or Grandcubs — New York–based 12 West Capital Management, founded by Joel Ramin in 2011; New York–based SRS Investment Management; and New York–based Miura Global Management.
Keep in mind that SRS was founded in 2007 by Karthik Ramakrishna Sarma, who worked for Tiger Global for five years. In the second quarter nearly 66 percent of SRS’s portfolio was invested in securities also held by Tiger Global. However, at year-end less than 14 percent of Tiger Global’s portfolio was invested in securities held by SRS.
SRS runs a very concentrated portfolio. At year-end more than 38 percent of its assets were invested in two car rental companies, Avis Budget Group and Hertz Global Holdings. However, the two stocks accounted for only 7.3 percent of Tiger Global’s assets.
Miura was founded by Pasco Alfaro and Richard Turnure in May 2004. It was not initially a Tiger Seed, but Robertson invested in the firm 18 months later. The pair left Tiger Management in 2010 to start an alternative energy fund. Ramin of 12 West previously worked at Bridger Management, founded by Roberto Mignone, who in turn previously worked at John Griffin’s Blue Ridge Capital.
