| John Griffin, Blue Ridge Capital |
As more hedge fund firms report first-quarter results, it has become apparent that many of the firms with roots in Julian Robertson Jr.’s Tiger Management have had a tough time.
Most of the roughly two dozen firms known as Tiger Cubs because their founders once worked for Tiger, Tiger Seeds because they were seeded by Tiger, or Tiger Grandcubs because they once worked for a Tiger Cub, lost money for the three-month period.
The losses were concentrated in the first two months. Many of the firms made money in March. If they hadn’t, the first quarter would have looked even worse.
A good example is John Griffin’s Blue Ridge Capital. The New York–based fund was down about 9 percent for the period. However, this was after posting a profit of more than 2 percent in March.
The decline followed Blue Ridge’s 3.4 percent gain in 2015, which beat a majority of hedge fund managers. However, in 2014, Blue Ridge suffered a 9 percent loss. As a result, Blue Ridge is down somewhere in the low teens since the beginning of 2014.
Interestingly, despite last year’s small gain, the firm’s total assets declined by $400 million, to $7.6 billion.
At the beginning of 2016, Blue Ridge was planning to launch a new long-only fund, the Blue Ridge Long Fund and its offshore counterpart, with an undisclosed amount of capital. It is not known how much the firm ultimately raised for those funds.
There is a lot of interest in the activities and results of Blue Ridge. For one thing, it is one of the oldest and deemed one of the most successful of the four dozen or so firms to emerge from the Tiger den. Blue Ridge is also one of the most opaque of all hedge fund firms.
It is not known exactly what caused Blue Ridge to lose 9 percent in the first quarter. However, many of its top ten holdings suffered sharp losses in the period.
Drugmaker Allergan, Blue Ridge’s largest U.S. long, was down more than 13 percent in the first quarter after surging more than 22 percent last year.
Specialty chemical giant W.R. Grace and Co., Blue Ridge’s sixth-largest long, fell more than 18 percent.
Sensata Technologies Holding, the Netherlands-based, U.S.-listed maker of sensors, fell more than 15 percent. Sensata is Blue Ridge’s seventh-largest long position traded on a U.S. stock exchange.
Autodesk, its second-largest position at year-end, fell 4.3 percent in the first quarter.
Blue Ridge did have several winners among its largest and highest-profile positions.Cable company Charter Communications, its third-largest U.S. long, surged more than 10 percent for the quarter as it awaited approval of its planned merger with Time Warner Cable.
The Priceline Group, Blue Ridge’s fourth-largest long, was up 1 percent, while Facebook, its fifth-largest U.S. long, rose 9 percent.
We have no idea how the firm’s shorts fared in the quarter.
We earlier reported that several Tiger-related firms, all based in New York, posted double-digit declines, including Tiger Global Management, down 21 percent; Falcon Edge Capital, down 14.6 percent; Hound Partners, down 12.3 percent; and Bloom Tree Partners, off more than 11 percent. Most of the rest posted losses in the single digits.
Only a handful were in the black in the first quarter. Tosca Opportunity, the major fund of London’s activist hedge fund firm Toscafund, was up 7.6 percent and New Canaan, Connecticut’s Impala Asset Management’s Impala Fund rose nearly 2 percent, while Nehal Chopra’s New York–based Tiger Ratan Capital fund came in roughly flat for the quarter.
Most of this large group of funds is heavily invested in the Internet, technology, media and telecommunications stocks that were among the big winners last year. And many of these firms like to run very concentrated portfolios.
And to make matters worse, many of the Tiger firms also lost money on their shorts in the first quarter.
