All is not so gloomy in the Tiger den.
Yes, we have chronicled a large number of hedge funds with ties to Julian Robertson Jr.’s Tiger Management that are solidly in negative territory this year. Many of them have been hurt by once high-flying technology, Internet and health care stocks that are now coming down to earth.
However, there are a handful of Tiger-related funds in the universe of roughly four dozen such managers that are solidly in the black this year, especially after posting very strong results in the third quarter. Several of them are among the largest, most well-known firms, while others are smaller, fledgling Tiger Cubs (whose managers worked directly for Robertson earlier in their careers) and Tiger Seeds (which received start-up capital from Robertson) desperately trying to get on the radar of more hedge fund investors.
For example, all of the main funds offered by Stephen Mandel Jr.’s Lone Pine Capital moved back into positive territory in the third quarter.
Its long-short funds gained about 4 percent — net of management fees but not incentive fees — in the September period, bringing their gains for the year to between 2 percent and 3 percent. Lone Cascade, the firm’s long-only fund, returned 7 percent in the quarter, net of management fee but not incentive fee, and is up 5 percent for the year.
Robert Citrone’s two main macro funds are also up this year after posting losses the two previous years. Discovery Capital Management’s Discovery Global Opportunity Fund netted about 3.4 percent through the middle of September, while Discovery Global Macro Fund gained 4 percent through the end of August, according to a hedge fund database. Both funds were faring as well or better as of the end of the third quarter and have extended their gains so far this month, according to an individual with knowledge of their results.
Robert Bishop’s Impala Asset Management, meanwhile, is one of the best-performing Tiger funds — or hedge funds in general, for that matter — this year. His Impala Fund notched an 8 percent gain in the third quarter and is now up 16.77 percent through September. The Waterbuck Fund, Impala’s long-only offering, surged 13.29 percent in the third quarter, extending its gains for the year to 26.08.
Bishop, who manages about $2 billion, is a so-called Tiger Cub who headed up the cyclicals and commodities groups for Robertson’s Tiger Management from 1992 to 1995. He also enjoyed a stint working for Tiger Cub Lee Ainslie III’s Maverick Capital and also served as chief investment officer of Soros Fund Management for 16 months.
Bishop’s gains are being fueled by his firm’s bullish bets on China and commodities.
Another major Tiger Cub who moved into the black in the third quarter is Philippe Laffont. His Coatue Management’s Coatue Fund gained around 4.5 percent in the September. As a result, it is now up 2.6 percent for the year.
Light Street Capital Management, founded in 2010 by Glen Kacher, is also profitable after posting a very strong third quarter. Its fund jumped 10.3 percent in the third quarter and is up 6.5 percent through late October.
In the quarter, it did especially well with Shopify, which develops software for online retailers, Chinese Internet and e-commerce companies, and a short on an unnamed Japanese stock, according to an individual familiar with its portfolio. Over the entire year it has done well shorting the stocks of companies engaged in social media, traditional media and mobile devices.
Before launching Light Street, Kacher spent time at Integral Capital Partners, joining as a principal in 1998 and becoming managing director in 2000. Before that, he worked at Tiger Management from 1993 to 1996 as a full-time research analyst and from 1996 to 1997 as a part-time consultant. At Tiger Kacher focused on the software, hardware, and networking industries.
We earlier reported that Tosca Asset Management’s Tosca Opportunity rose 5.6 percent in the third quarter, boosting the fund’s gain for the year to 13.3 percent. Performance was led by esure Group, a UK auto insurer that announced the demerger of its price comparison company Gocompare.com. The fund, managed by Martin Hughes, also benefitted from RhythmOne, an advertising-tech company that announced very strong growth. Tosca still holds positions in the two stocks. The strategy manages $1 billion.
Cat Rock Capital, founded by Alex Captain, surged 6.5 percent in the third quarter and 15.6 percent for the year. Captain is a former partner at Chase Coleman’s Tiger Global Management, focusing on non-Internet stocks.
Cat Rock, which manages about $350 million, likes to take a concentrated position in about one dozen stocks, one-third of which are of companies based outside the U.S. Third-quarter performance was driven by aircraft component maker TransDigm Group, a favorite among the Tiger crowd, Canadian software maker Constellation Software, and Liberty Broadband, a company whose main assets are interests in Charter Communications and its subsidiary TruePosition.
Finally, Tiger Legatus Capital Management, a Tiger Seed headed by Jesse Ro, posted a 7.8 percent gain in the third quarter in its long-short fund. This enabled the New York firm’s fund to move into the black, by 40 basis points.
