Hedge-fund pioneer Julian Robertson Jr. has died at 90
Robertson led profitable fund, trained and backed a generation of managers
Julian H. Robertson Jr., a pioneering hedge-fund investor, died at the age of 90. For two decades, Mr. Robertson led one of Wall Street’s largest and highest-profile funds, Tiger Management LLC, scoring average annual gains of about 25%. Mr. Robertson trained and backed a number of successful managers who became known as "Tiger Cubs."
Mr. Robertson suffered cardiac complications and died Tuesday in his home in Manhattan, according to his spokesman.
A native of North Carolina, Mr. Robertson served as an officer in the U.S. Navy before joining Kidder Peabody in 1957, becoming a director of the brokerage firm and running its investment subsidiary. He left in 1978 and started Tiger in 1980, launching the firm with $8 million. The firm’s name derived from the term Mr. Robertson used for those whose name he couldn’t recall, according to Daniel Strachman, who wrote a biography of Mr. Robertson. In turn, staffers called Mr. Robertson "Big Tiger."
Employing an approach that would become traditional for hedge-fund traders—buying inexpensive stocks with good earnings prospects while betting against expensive shares—Mr. Robertson met early success. Tiger gained 54.9% in its first year and outperformed the overall market in most subsequent years. Over time, he invested in bonds and other markets, in addition to stocks. By the late 1990s, Mr. Robertson managed about $22 billion, emerging with George Soros and Michael Steinhardt as Wall Street’s most renowned hedge-fund traders.
Then Mr. Robertson stumbled. In 1999, as investors became enamored with expensive technology stocks and markets soared, Mr. Robertson turned cautious and Tiger lost 19%. At an annual meeting at New York’s Plaza Hotel, investors harangued Mr. Robertson about the fund’s dreadful performance.
"It was awful, really awful," Mr. Robertson later recalled.
Tiger lost an additional 13.5% in early 2000. On vacation in New Zealand, a dispirited Mr. Robertson decided to get out of the hedge-fund game and hand money back to clients.
"This approach isn’t working and I don’t understand why," Mr. Robertson recalled thinking. "I’m 67 years old, who needs this?"
On the day he announced the move, the stocks he had eschewed began tumbling and his favorites soared, the beginning of a crushing bear market for tech stocks Mr. Robertson had anticipated.
Mr. Robertson never groomed a successor, but he trained and mentored a crop of analysts and portfolio managers who left to start their own hedge funds, sometimes hiking with them in Idaho and Wyoming to build camaraderie. These investors, in turn, trained others, resulting in a complex of funds that became known as Tiger Cubs and Tiger Grandcubs. They continue to manage tens of billions of dollars for clients, often sharing investment ideas and holding overlapping stock portfolios.
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Prominent Tiger Cubs include Andreas Halvorsen of Viking Global Investors; Philippe Laffont of Coatue Management; Stephen Mandel of Lone Pine Capital; Lee Ainslie of Maverick Capital; and Charles "Chase" Coleman of Tiger Global Management. Some of these investors became influential, embracing big investments in private companies well before others. Mr. Robertson also provided the financial backing for hundreds of other funds over the last two decades through Tiger Management, which continued to manage his own money.
"Julian was a legendary investor and a generous mentor," said Mr. Laffont in a statement Tuesday. "We all feel lonelier without him here."
Some Tiger Cubs fared poorly. Bill Hwang’s Archegos Capital Management imploded in 2021, saddling Wall Street banks with billions in losses. Mr. Hwang was indicted in April on securities fraud and racketeering charges in what prosecutors said was a massive fraud and manipulation scheme that nearly jeopardized the U.S. financial system.
At the time, Mr. Robertson told Bloomberg News: "Here was a really good guy who made a terrible mistake."
An active philanthropist and environmentalist, Mr. Robertson owned New Zealand golf resorts and vineyards and built a 5000-acre sheep farm in the country. In 2009, he famously won a $27 million tax case arguing he wasn’t a New York City resident for the year 2000 and didn’t owe taxes.
Mr. Robertson contributed about $2 billion to charity during his lifetime, according to his spokesman, including more than $250 million to fight poverty in New York City. He pledged to donate the bulk of his estate to charity.
Mr. Robertson is survived by his sons, Spencer, Julian III and Alexander, as well as nine grandchildren. His wife, Josephine, died in 2010.