Julian Robertson

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Julian H. Robertson Jr. (born 1932) is a American former hedge fund manager. Now retired, Robertson invests directly in other hedge funds, most run by former employees of Robertson's defunct hedge fund company.

He was born in Salisbury, North Carolina in the United States. Robertson founded the investment firm Tiger Management Corp., one of the earliest hedge funds. Robertson is credited with turning $8 million in start-up capital in 1980 into over $22 billion in the late 1990s, though that was followed by a fast downward spiral of investor withdrawals that ended with the fund closing in 2000.

In 1993, his compensation and share of Tiger's gain exceeded $300 million. His 2003 estimated net worth was over $400 million, and in September 2009 it was estimated by Forbes at $2.2 billion, a substantial increase from the $1.3 billion estimated the previous year.[1][2] Robertson said in 2008 that he shorted subprime securities and made money through credit default swaps. [3] The following year, according to Forbes, Robertson's return on his $200-million personal trading account was 150 percent.[4]

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[edit] Early life

Robertson is a native of North Carolina, the son of Julian Hart Robertson Sr., a textile company executive, and the former Blanche Spencer.[5] He graduated from Episcopal High School in 1951 and the University of North Carolina at Chapel Hill in 1955. While at Chapel Hill, he was admitted to Zeta Psi fraternity. He then served as an officer in the U.S. Navy until 1957. He worked for a time as a stockbroker for Kidder, Peabody & Co., where he later headed up the firm's asset management division (Webster Securities) before departing to move with his family to New Zealand for a year to write a novel. On his return, Robertson launched Tiger Management with initial investments from friends and family.

[edit] Tiger funds

The Tiger funds reached a peak of $22 billion in assets in 1998. But a combination of poor stock picking and failure to exploit the technology stock craze caused Robertson's funds to suffer steep losses at the end of the decade, prompting investors to withdraw cash.[6] When the Standard and Poor's 500-stock index climbed 21 percent in 1999, the Tiger funds declined 19 percent.

Julian is most notably quoted as claiming, "our mandate is to find the 200 best companies in the world and invest in them, and find the 200 worst companies in the world and go short on them. If the 200 best don't do better than the 200 worst, you should probably be in another business."[7]

Tiger's largest equity holding at that time was U.S. Airways, whose troubles dragged down the value of his holdings. Such missteps ultimately led him to close his investment company in March 2000 and return all outside capital to investors. Tiger earlier made $2bn in gains but then gave most of them back during a huge one-day move in the yen in 1998. In September 2001, Robertson distributed 24.8 million greatly devalued U.S. Airways shares to former Tiger investors. Robertson declared his intent to hold onto his own stock in the airline.[8] U.S. Airways declared bankruptcy in August 2002, and shareholders in the airline were wiped out.[9]

[edit] After Tiger

After closing his fund in 2000, Robertson kept his hand in the hedge fund business by supporting and financing upcoming hedge fund managers (38 in total as of September 2009), in return for a stake in their fund management companies. Apart from those, many of the analysts and managers Robertson employed and mentored at Tiger Management went out on their own and are now running some of the best-known hedge fund firms, called “Tiger Cubs”. [10]

Today, Robertson is an active philanthropist and serves on a number of organization and university boards. He is the founder and benefactor of the Robertson Scholars Program which awards a merit scholarship that provides four-year full-tuition, room and board, and travel funding for 36 Duke University and University of North Carolina students each year.

He also is active as an investor and developer in New Zealand, where he spends much of his time. He owns both Kauri Cliffs Lodge near Kerikeri in Northland, and The Farm at Cape Kidnappers, Hawkes Bay, as well as several wineries.

[edit] References

  1. ^ 400 Richest Americans—Julian Robertson
  2. ^ http://www.forbes.com/lists/2009/10/billionaires-2009-richest-people_Julian-Robertson-Jr_GK7Q.html
  3. ^ Tiger's Julian Robertson Roars Again, Brian O'Keefe, Fortune Senior Editor, Jan. 28, 2008
  4. ^ 400 Richest Americans—Julian Robertson
  5. ^ Julian Robertson: A Tiger in the Land of Bulls and Bears, Daniel A. Strachman, Published by John Wiley and Sons, 2004, ISBN 0471323632
  6. ^ http://www.hedgefundhistory.com/famousfunds.html
  7. ^ http://www.investopedia.com/university/greatest/julianrobertson.asp
  8. ^ "INVESTING: DIARY; Left Holding the Bag On US Airways Stock," By Laurence Zuckerman, Sept.23,2001 http://www.nytimes.com/2001/09/23/business/investing-diary-left-holding-the-bag-on-us-airways-stock.html
  9. ^ "US Air files for bankruptcy: Airline gets OK for $75M in emergency financing; shareholders to be wiped out." CNN Money, Aug. 12, 2002 http://money.cnn.com/2002/08/11/news/companies/usair/
  10. ^ http://www.opalesque.com/tiger - list of 38 Tiger Seeds and 32 Tiger Cubs

[edit] Further reading

[edit] External links

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