Julian Robertson 1987 Barron’s Interview
TIGER is the name of Julian Robertson’s main hedge fund. Right now, it’s a wounded tiger; its
major shorts were in the Japanese market when the October massacre hit everyplace else worse. So, he says with no little chagrin, it underperformed.
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But Robertson, a canny veteran of 30 years in Wall Street, and one of its more successful
money managers, is undaunted. Indeed, sensing a surfeit of gloom among investors, he’s been scaling back his shorts — except in Japan — and adding to his long positions. He’s still convinced that there’ll be a substantial downward realignment of valuations in Japan — he hopes slowly, but probably in a panic. Either way, he says, that will signal a great buying opportunity in this market and others — and he isn’t waiting for any bell to ring to prepare for it.
Julian did some grumbling about a dearth of good shorts when we talked with him the other
day, but mostly, this Q&A records his thinking on what, today, look like good buys.
— Kathryn M. Welling
BARRON’S: Julian, you spent quite a few years at Kidder Peabody before striking out on your own, didn’t you?
Robertson: I really worked there all my life until I started this fund. I started there in ’57 and actually left in 1978 to take a sabbatical.
Q: A sabbatical?
I took the kids and all and did kind of a middleage hippie dropout to New Zealand. But I was
sort of still with Kidder. They wanted me to stay, and I didn’t formally resign until Dec. 31, 1979.
Q: And over that long stretch at Kidder you…
I was a salesman there and became a stockholder, I guess, in about ’66. I became a
director eventually and then took over the investment advisory department in 1974.
Q: But you left Kidder too soon to get a cut of General Electric’s money?
That’s right. It was tragic.
Q: Oh, well, from all reports you haven’t done too badly.
It’s worked out all right.
Q: So, you went into business for yourself when you dropped back in from New Zealand at the end of 1979?
We really didn’t get the fund under way until about May of 1980. It took that long to get the clients and the legal aspects of it going.
Q: You’re talking now about “Tiger,” your hedge fund, right?
That’s right. By now, we’ve also got several other funds. Jaguar, which was started in September of 1980, and then later on, Jaguar N.V. and Puma. They’re all investment partnerships that, you know, go short. But there are big differences in them. Altogether, we’re running $315 million, something like that.
Q: What are the differences among your hedge funds?
Tiger is really mainly for the American individual. Jaguar, the way it’s set up, is primarily for eleemosynary institutions and pension funds, tax-free type things. Jaguar N.V. is, of course, for foreign investors. And Puma has a four-year lockup — no one can get in or get out for four years. It also has a layer of insurance company debt on top of its equity capital structure.
Q: So it’s a real high-wire act.
Well, not really. We are hedging the debt.
Q: We have to ask. Why this thing about exotic cats? Are you a big game hunter?
Not at all. I’ve always had the habit of calling people “Tiger” when I didn’t know who they were. Rather than call them “Fellow” or something, I’d just say, “Tiger.” And when we were trying to find a name for the fund, my son said, “What about Tiger?” He was about seven at the time, and we picked it.
Full interview here oddlotinvest