Billionaire investor Julian Robertson has backed more than 40 up-and-coming hedge fund managers and inspired countless others who learned the trade under his watch at Tiger Management. The list of his “Tiger Cubs” is an extensive one, including Charles Shumway, Lee Ainslie and John Griffin. Also belonging to the club are Steve Mandel, and Feroz Dewan with Chase Coleman.
Mandel is the head of Lone Pine Capital, which he launched in 1997 after a stint as a consumer analyst and managing director at Tiger Management. Today, he has about $27 billion in assets under management. Dewan and Coleman started their fund, Tiger Global Management, in 2000 with $25 million from Robertson. It trounced the market in 2011 and 2012 and has a significant venture capital arm as well.
Though they’re both part of the tiger cub club, Mandel and Tiger Global have divergent styles of investing. The same holds true when compared to Robertson himself. The three demonstrate a marked interest in technology, but their approaches to the sector are quite diverse.
Technology is a bit of a sore subject for Robertson, who in the late ‘90s missed out on major opportunities in the field and, in turn, saw his assets under management plummet. However, the billionaire seems to have warmed up to the sector in recent quarters.
Over the past year, Robertson has consistently upped his tech allocations. The sector comprised just 16% of his holdings during the second quarter of 2013. Cut to a year later, it composes more than 35% of his portfolio. Inversely, his positions in more traditional fields like industrials and financials have declined, as well as in consumer discretionary, which has dropped from a 26% allocation in Q2 2013 to 7% in Q2 2014.
[drizzle]This is how his sector allocations have evolved in the past year:
What’s Robertson been buying in tech? Try Tableau Software Inc (NYSE:DATA), Facebook Inc (NASDAQ:FB), Micron Technology, Inc. (NASDAQ:MU) and Apple Inc. (NASDAQ:AAPL). He’s an especially big fan of Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), holding both Class A and Class C shares and in June telling CNBC that he considers the tech giant to be one of the best run companies in the world.
Both Tiger Global and Mandel are tech-heavy investors, the sector comprising 26% and 29% of their second quarter portfolios, respectively. But they’re not following Robertson’s picks – not even on billionaire favorite Apple.
Julian Robertson leans towards larger, more established technology companies, while Mandel and Coleman seem to prefer smaller opportunities with a greater potential for growth.
The average market cap of Julian Robertson’s top 10 IT holdings is $178.2 billion, and only one of his picks – Tableau – has a market capitalization of under $10 billion. The average market cap of Mandel’s 10 most significant tech allocations is $64.7 billion, with only one, Microsoft, surpassing the $100-billion mark. Coleman’s case is even more extreme, with the average market cap of his leading tech holdings at $9.5 billion.
Mandel and Coleman look to foreign entities for tech investment opportunities – especially China.
The Lone Pine Capital head’s most significant position as of Q2 is Chinese internet search engine Baidu Inc (ADR) (NASDAQ:BIDU), which comprises 6.74% of his equity holdings. Both billionaires have allocations in real estate portal SouFun Holdings Ltd (NYSE:SFUN), Mandel with 25.36 million shares and Coleman 864,000. Also in Tiger Global’s China tech portfolio are Autohome Inc (ADR) (NYSE:ATHM) and Qihoo 360 Technology Co Ltd (NYSE:QIHU).
Tiger Global demonstrates a penchant for new companies and recent IPOs as well – not surprising given his venture capital endeavors. His recently-public tech picks include GrubHub Inc (NYSE:GRUB), King Digital Entertainment PLC (NYSE:KING), 58.com Inc (ADR) (NYSE:WUBA), iRobot Corporation (NASDAQ:IRBT) and Nimble Storage Inc (NYSE:NMBL) (see more about his lesser-known endeavors in the sector here).
Yes, while tiger Robertson and cubs Coleman and Mandel are more than willing to bet on technology, the nature of their investment strategies in the sector demonstrate marked differences. Robertson sticks to surer bets. Mandel plays the field a bit more, his holdings ranging from iBillionaire Index stock Microsoft to mid-cap pick SolarWinds. And Tiger Global, it appears, is going for growth.