Julian Robertson took a deceptively simple approach to investing: own the best companies and bet against the worst ones. To succeed in the investment world means being right on more occasions than you are wrong. And for most of Robertson’s time running Tiger Management — the hedge fund firm he founded in 1980 — he was right.
Robertson, who has died aged 90, was an investment industry giant who spawned a dynasty of hedge fund managers known as the “Tiger cubs”.
Born in North Carolina in 1932, Robertson served as an officer in the US Navy after university. In 1957, he joined Kidder, Peabody & Co, an American securities firm, as a sales trainee, where he befriended the son-in-law of Alfred Winslow Jones, the intellectual father of the hedge fund industry. This would lay the foundations for Tiger’s investment approach.
In 1978, Robertson moved to New Zealand intending to write a novel but soon returned to New York. Aged 48, he co-founded Tiger, named after his tendency to call people “Tiger” when he could not remember their name. Launched with initial capital of $8mn, it grew to over $21bn at its peak. Over its two decades, the fund delivered average annual returns of more than 25 per cent, and beat the S&P 500 in 14 of the years.
Tall, slender and gregarious, Robertson dressed in Savile Row suits, spoke with a Carolina drawl and wore his sharp intellect casually. “He was a charmer in a southern way, a networker in a New York way,” writes Sebastian Mallaby in his book More Money Than God. “He was a guy’s guy, a jock’s jock, and he hired in his own image.”
The typical Tiger analyst was competitive, curious, extroverted — and male. Being on Robertson’s team “was like the Navy Seals,” recalls Tiger cub Philippe Laffont, who went on to found Coatue Management. Every morning at 6am sharp, Robertson rang the trading desk to check in on performance. Analysts were interrogated on investments with their boss pouncing on a rogue decimal place or a wrong number. Robertson would challenge traders to an exercise bike race in the gym and fly them to outward bound retreats in Idaho’s Sawtooth Mountains in his private plane. The women Tiger employed in support roles “looked like supermodels” recalls one visitor.
Robertson enjoyed learning from young people. He was unfamiliar with the market for credit default swaps until one of his analysts told him about it a few years before the financial crisis. He decided to trade CDS and made triple digit returns in 2007-2008.
Tiger’s simple investment approach belied a forensic analysis of companies and their management. Robertson could be short-tempered but his force of personality helped build a diverse group of investors including singer Paul Simon, writer Tom Wolfe and Blackstone founder Steve Schwarzman. In 1998 he even persuaded former UK prime minister Margaret Thatcher to join the advisory board.
Short seller Jim Chanos recalls running a short portfolio for Tiger in the nineties and being regularly summoned to the firm’s 101 Park Avenue headquarters to defend his ideas. After the first lunch, Robertson walked Chanos to the lift. “Jim, that was great and thank you for coming over,” he said. “Also, please cover that short” — ie close out the investment.
Tiger’s legacy is as much the success of Robertson’s protégées — among them Laffont, Chase Coleman, John Griffin, Lee Ainslie, Steve Mandel and Andreas Halvorsen — as it is his own track record. Almost 200 hedge fund firms can trace their origins back to Tiger Management, including Bill Hwang’s Archegos Capital Management, which blew up spectacularly in 2021.
Robertson, who is survived by three sons and nine grandchildren, gave over $2bn to charity, and was among the early signatories to the Giving Pledge. “When Julian got a philanthropic recommendation from someone he trusted, he immediately wrote a cheque that always involved a lot of zeros,” Warren Buffett, who co-created the Giving Pledge, told the FT. “He never wanted a word of recognition or thanks.”
As Tiger grew, it expanded beyond its core expertise in US equities into government bonds, commodities and currencies. Some of the drivers of Robertson’s success — hefty bets with unshakeable conviction — were eventually his undoing. A huge wager against the Japanese yen and a large position in airline USAir proved painful, while his refusal to embrace the dotcom boom — which he said was “unwittingly creating a Ponzi pyramid destined for collapse” — cost the fund a fifth of its value in 1999.
Robertson was ultimately right about the dotcom bubble. But it was too late for Tiger. After losses and a slump in assets, the hedge fund finally returned outside investor money in 2000. Its charismatic founder was living proof that in the stock markets, being early is the same as being wrong. Harriet Agnew, Laurence Fletcher, Ortenca Aliaj and Eric Platt
