Here's an excerpt from the WSJ atricle on the Tiger Management Corp hedge fund:
"Tiger Funds Maul Rivals, Returning a Hefty 63%
By LAURA JERESKI
Staff Reporter of THE WALL STREET JOURNAL
Think you had a good year? Consider the take at Tiger Management Corp., the hedge-fund group managed by Julian Robertson. So far this year, those funds' performance is up about 63% before fees, which in turn has boosted capital by almost $6 billion, to more than $15 billion. That is the single-largest surge in capital this year for any of the private-investment partnerships known as hedge funds.
Some hedge funds, such as Jeff Vinik's Vinik Asset Management,
have had superior performance this year, but on far smaller pools of
capital. Mr. Vinik's fund was up 91.6% before fees through the third
quarter; current results aren't available. Soros's flagship Quantum
Fund, run by investment chief Stan Druckenmiller, on the other
hand, is up only 13.7%, after fees, through Dec. 15, the firm says.
By and large, though, hedge funds have shared the fate of other
active money managers: On average, they couldn't keep up with
the S&P 500's blistering year-to-date return of about 30%.
One reason Tiger's gains came so quickly: leverage. Like other hedge funds, the 65-year-old Mr. Robertson leverages his capital to juice up his bets in stocks, bonds, currencies or commodities. That leverage, which can come through borrowings, options positions or paired purchases and sales of investments, has been steadily ratcheting up since 1994, a rocky year when many funds pulled in their horns. Tiger holds total positions of about $38 billion, or 2 1/2 times its capital, though purchases and sales net out to a fraction of that.
Mr. Robertson said in an interview that the bulk of his gains came from stock-market bets, which he says encompass equity futures positions in Japan and Hong Kong as well as big stakes in individual U.S. stocks. He also has longstanding short positions, among them Micron Technology and Ascend Communications."
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