Started the fund with about $8 million
His own fund-closing letter says he started in May 1980 with Thorpe McKenzie with total capital of $8.8 million. Some sources round it to $8 million
Famous Traders · Long/Short
Julian Robertson
Julian Robertson / The Tiger Management Legend Who Turned His Protégés into World-Class Hedge Funds
The man from North Carolina who turned $8.8 million into a fund of about $21 billion with a simple rule: buy the best and short the worst. On this page you can build a Tiger-style Long/Short portfolio, hold USD/JPY through the days the yen jumped 14%, and see what it costs to be right but too early.
LETTER TO PARTNERSThe Tiger YearsTIGER MANAGEMENT · 1980–2000
JRJULIAN H. ROBERTSON JR.
- MAY 1980Started with $8.8 million
- AUG 1998Fund assets grew to about $21 billion
- OCT 1998The yen rose about 14% in two days
- MAR 2000Returned all money to investors
Illustration: designed as a folder of investor letters, because his 2000 fund-closing letter is his most quoted document
Born1932
Tiger1980–2000
Per year, to the peak31.7%
First capital$8.8M
1980–199831.7%/yrNet-of-fee return up to the peak, according to his investor letter
1980–2000×85Invested money grew about 85 times over the fund’s life, or about 25% a year net of fees
THE LEGACY38+Tiger Seed funds he had backed by 2009, according to Wikipedia, not counting the first-generation Tiger Cubs
01
ProfileQuick facts
NameJulian Hart Robertson Jr.
Born25 June 1932 in Salisbury, North Carolina, USA
Died23 August 2022 in New York City, aged 90
EducationBachelor’s degree in business administration from the University of North Carolina at Chapel Hill in 1955, then served in the US Navy until 1957
Before his fundWorked at Kidder Peabody for about 20 years, starting as a stockbroker and rising to run its asset management arm, Webster Securities
His own fundFounded Tiger Management with Thorpe McKenzie in May 1980 with $8.8 million, and returned all investor money in March 2000
Best known forHis investor letter reported a net-of-fee return of 31.7% a year up to the 1998 peak, with fund assets growing to about $21 billion
StyleLong/Short Equity, buying the best stocks and shorting the worst based on deep fundamental analysis, alongside Macro bets on currencies and other markets
LegacyProtégés known as the Tiger Cubs went on to found dozens of leading funds, and he gave more than $2 billion to charity
02
Early lifeFrom North Carolina to Wall Street and the biggest tiger in the hedge fund jungle
Robertson was a Southerner from a textile business family. He studied business, served in the navy, then entered Wall Street as a stockbroker. He spent about 20 years at Kidder Peabody before deciding to start his own fund at 47
Tiger stood out for its team of young analysts who researched companies in great depth. Robertson picked talented, highly competitive people and trained them to think like owners of the money. These were the Tiger Cubs, who later opened their own funds and became one of the largest hedge fund family trees
STRIPES · 1932–2022Tap each tiger stripe to read about a stage of his life
Born on 25 June 1932 in Salisbury, North Carolina. His father was an executive in the textile business. He grew up in a small Southern town and graduated from Episcopal High School in Virginia in 1951
1 / 10
The key to success, per his 2000 letterTiger’s success came from consistently buying the best stocks and shorting the worst
Paraphrased from his investor letter of March 2000, not a direct quote
03
Long the best, short the worstLab: build a Tiger-style Long/Short portfolio
Tiger bought the stocks it thought were best and shorted the ones it thought were worst. If the picks are right, the portfolio profits on both legs, and the short leg also cushions it when the market falls. But if the market chases bad stocks, both legs lose at the same time. Try adjusting it
Long leg
—
Short leg
—
Tiger-style portfolio
—
Index only
—
Net = Long − Short—
Gross = Long + Short—
Beat or lag the index—
Stock-picking skill means how many % your long stocks beat the market and how many % your short stocks lagged it. A negative value means the stocks you shorted ran harder than the market. A simple one-year calculation excluding fees, interest and stock borrowing costs. Exposure above 100% means using leverage
RESEARCH NOTE · COST OF TRADING
Commission is a cost to cut too Open an XM account through 1TRADER and get up to 90% of the IB commission on every lot you trade
Open account ↗1TRADER is a partner (IB) and earns a commission when you open an account through our link · % is the share of IB commission returned to you · How to get rebates
04
The yen, October 1998Lab: hold USD/JPY through the day the yen jumped 14%
In 1998 many investors borrowed low-interest yen to hold higher-yielding dollars, a carry trade equivalent to Long USD/JPY. Tiger also held a large short-yen position. The dollar rose to about 147 yen in August, then in early October the yen strengthened rapidly. Choose a position size and see the effect on the portfolio
Peak profit along the way—
Two days, 6–8 Oct—
Interest earned over the period—
Portfolio at end of Oct—
The price line is a weekly simulation, with daily points for 5–9 October, anchored to reported levels such as about 147 yen per dollar in August and the roughly 14% two-day rise recorded by the Bank of England. Interest earned assumes a rate gap of about 5% a year. This is not Tiger’s actual position and excludes the effect of its other positions
The image analysts often use for the carry tradeLike picking up pennies in front of an oncoming steamroller
A common saying in the industry, not Robertson’s own words
05
Right, but earlyLab: right that it’s a bubble, but too early
From 1999 to early 2000, tech stocks soared while the value stocks Tiger favoured were dumped. Poor performance made investors pull their money. Look at a hypothetical fund that is Long value stocks and Short bubble stocks, and adjust how long the bubble keeps inflating after you start shorting, and how big the short is
Deepest drawdown per unit—
Fund assets when the bubble bursts—
Final unit value—
An entirely hypothetical model, not Tiger’s real portfolio. Bubble stocks rise about 10% of their starting price each month until the chosen month, then fall to 60 within 12 months. The long value leg stays flat during the bubble and recovers after it bursts. Fund assets start at 100, and when the unit value is more than 10% below its peak, investors withdraw 6% a month
From the fund-closing letter, March 2000In a rational market this strategy works well, but in an irrational market, where earnings and price considerations are ignored, this logic does not count for much
Paraphrased from Robertson’s investor letter, not a direct quote
LONG REBATE · SHORT COSTLong the rebate, short the costsTrade with XM account through 1TRADER and get up to 90% of the IB commission on every lot
1TRADER is a partner (IB) and earns a commission when you open an account through our link · % is the share of IB commission returned to you · How to get rebates
06
Tiger CubsThe tiger family tree: protégés who launched their own funds
Robertson’s greatest legacy may not be Tiger’s returns but the people he trained. Many former team members left to start their own funds, some with seed money from him. Tap a fund’s name to read its story
A former Tiger analyst founded Maverick Capital in Dallas in 1993, a Long/Short equity fund using Tiger’s company research approach
The years shown are the years the funds were founded, according to public information. This list is only a sample; there are many more funds in this lineage. Being on the list is not a recommendation to invest
07
Fact checkFact check: truth and legend
Famous investors’ stories are often retold until they are exaggerated. We sort each one by the weight of the evidence
A 31.7% annual return net of fees
This figure comes from his investor letter for the period from May 1980 to the 1998 peak, and is self-reported by the fund. Wikipedia compares it with about 12.7% a year for the S&P 500 over the same period
Tiger made 31.7% a year over the fund’s whole life
Counting up to the fund’s closure in 2000, the letter says invested money grew about 85 times net of fees, or about 25% a year. The 31.7% figure only applies up to the peak
Managed $22 billion, the largest in the world
Most news sources put it at about $21–22 billion in 1998 and often call it the largest hedge fund of its time. His own letter uses $21 billion. The figures differ depending on the date measured
Lost more than $2 billion in a single day on the yen
Slate reported that Tiger lost more than $2 billion in a single day when the yen strengthened rapidly. The Bank of England recorded that the yen rose about 14% over 6–8 October 1998, the biggest two-day move since 1973
Tiger only traded stocks
Tiger held both long and short positions in stocks and also made Macro bets on currencies, bonds and commodities, which is where the 1998 yen loss came from
Tiger closed because it went bust
He chose to return the money to investors himself after poor performance and about $7.7 billion of withdrawals since August 1998. When the fund closed it still held several billion dollars, and he went on managing his own money
He was wrong about the dot-com bubble
He was right that tech stocks were overvalued, but he was right too early. The Nasdaq peaked on 10 March 2000, about 20 days before he announced the fund’s closure, then fell heavily over the next two years
His protégés opened dozens of hedge funds
Tiger Cubs such as Maverick, Lone Pine, Viking and Tiger Global are known worldwide, and Wikipedia says that by 2009 he had invested in 38 Tiger Seed funds
Every lot you trade with XM through 1TRADER earns cash back of up to 90% of the IB commission, lowering your costs over time
Open an account for cash back ↗1TRADER is a partner (IB) and earns a commission when you open an account through our link · % is the share of IB commission returned to you · How to get rebates
08
LessonsLessons for Forex and gold traders
Your checklist
0/4
Buy the best, sell the worst
In Forex the same principle means pairing the currency with the strongest fundamentals against the weakest one, rather than guessing the direction of the whole market
Carry trades win small and lose big
The interest earned from holding a pair like USD/JPY may be just a few percent a year, but when the currency reverses, months of damage can happen in two days
If you don’t understand the market, step back
His 2000 letter said there was no reason to put investors at risk in a market he did not understand. Cutting size or stopping trading can be a good decision too
Being right but too early can still lose money
Markets can stay irrational longer than your account can hold out. Set your position size by what you can withstand, not by how confident you are
09
Quiz5-question quiz
Question 1 / 5
When did Tiger Management start, and with how much money?
He started the fund with Thorpe McKenzie in May 1980 with total capital of $8.8 million
What principle did his 2000 letter call the key to Tiger’s success?
He wrote that success came from consistently buying the best stocks and shorting the worst
In early October 1998, what caused Tiger’s heavy losses?
The yen rose about 14% in two days while Tiger held a large short-yen position
Long USD/JPY at 70% of the portfolio, then the yen rises 14%. Roughly how much does the portfolio lose?
70% × 14% ≈ 9.8% of the portfolio, close to CNN’s report that Tiger’s funds fell about 10% during that period
What does “Tiger Cubs” refer to?
For example Lee Ainslie (Maverick), Stephen Mandel (Lone Pine) and Chase Coleman (Tiger Global)
0/5
10
Trade like a TigerFollow the tiger’s tracks: pick well, size properly, know when to step back
What you can apply is pairing the strongest with the weakest, being wary of oversized carry trades, and having the courage to cut size when the market turns irrational.
REBATE · 1TRADER
Trade like a pro: control your costs
Open an account through 1TRADER and get cash back on every lot you trade, lowering your spread and commission costs over time.
How to get rebates, step by step →Leveraged trading carries high risk. Study the broker’s terms and the risk disclosure before opening an account.
11
Further readingFurther reading
- Julian Robertson: A Tiger in the Land of Bulls and BearsDaniel A. Strachman · 2004A biography of Robertson and Tiger Management from its early days to the fund’s closure in 2000
- More Money Than GodSebastian Mallaby · 2010A hedge fund history with a chapter on Tiger, the 1998 yen bet and the return of investor money in 2000
12
FAQFrequently asked questions
Who is Julian Robertson?
An American fund manager born in 1932 who founded Tiger Management in 1980 with $8.8 million. The fund grew to about $21 billion in 1998 and was the origin of the Tiger Cubs family of funds
What returns did Tiger Management make?
His investor letter reported 31.7% a year net of fees from 1980 to the 1998 peak. Counting up to the fund’s closure in 2000, invested money grew about 85 times, or about 25% a year
Why did Tiger close?
After the 1998 yen losses and poor performance during the tech bubble, investors withdrew about $7.7 billion. He felt the market had become so irrational that he could not understand it, so he returned all the money in March 2000
Who are the Tiger Cubs?
Former Tiger team members who started their own funds, such as Maverick Capital, Lone Pine Capital, Viking Global, Coatue and Tiger Global. Many received seed money from Robertson
How can his ideas be used with Forex and gold?
Pair the strongest currency against the weakest based on fundamentals, be careful with large carry trades because the interest earned is small compared with the risk when the currency reverses, and if the market moves in ways you don’t understand, cut size or stop first
Educational content, not investment advice. Return figures are publicly reported figures. The labs use made-up data and models. · risk disclosure · Forex glossary