The progeny of legendary investor Julian Robertson’s Tiger Management enjoyed a second consecutive year of impressive double-digit returns in 2024, rebounding significantly from a challenging 2022. This resurgence highlights the resilience and adaptability of these “Tiger Cub” funds in navigating the ever-changing financial landscape.
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Several prominent Tiger Cubs capitalized on the soaring technology sector. Lone Pine Capital, known for its tech-focused investments, reported a remarkable 36% gain. Tiger Global Management, another significant player in the tech space, achieved a 24% return. Coatue Management, with its emphasis on technology and growth stocks, also saw a substantial return of approximately 19%.
A key driver of this success was the impressive performance of Meta Platforms Inc., a major holding for all three firms. Meta’s stock rallied 65% in 2024, contributing significantly to the overall gains of these funds. This underscores the importance of strategic stock selection in a market heavily influenced by a few dominant players. The broader market, as represented by the S&P 500, saw a 23% increase, largely fueled by the performance of tech giants like Nvidia Corp., Apple Inc., Amazon.com Inc., and Meta.
While 2024 marked a significant recovery, some funds are still working towards recouping previous losses. Coatue surpassed its high-water mark, fully recovering from its 2022 downturn. However, Lone Pine requires an additional 6.4% gain to offset declines from 2021 and 2022, while Tiger Global needs a more substantial 53.8% increase to reach the same milestone. This highlights the long-term perspective often required in hedge fund investing.
Beyond the tech giants, some funds achieved exceptional results through diverse strategies. Contour Asset Management, a $3 billion fund, generated a 47.8% return, leveraging short positions and strategic sector allocation within technology, media, and telecommunications. Notably, Contour did not hold significant positions in Nvidia and Apple for much of the year and reduced its Amazon stake. This demonstrates the potential for outperformance through differentiated investment approaches.
Rubric Capital, a $4 billion fund managed by David Rosen, soared by an impressive 81.5%. This remarkable performance was largely driven by a significant investment in Talen Energy Corp., a power company poised to benefit from the growing demand for electricity from data centers. Talen’s stock price more than tripled in 2024, showcasing the potential for high-conviction investments in specific sectors.
D1 Capital Partners, led by Dan Sundheim, saw its stock portfolio rise by 44.6%. However, this represents only a portion of the firm’s $21 billion in assets, with the remainder allocated to venture capital investments. This diversified approach highlights the evolving landscape of hedge fund strategies.
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Looking ahead, a forthcoming Bank of America Corp. survey indicates strong investor interest in stock-picking hedge funds for 2025. Approximately 38% of surveyed investors plan to increase their allocation to equity long-short funds, while only 5% anticipate reducing their exposure. However, concerns remain regarding crowding into popular stocks and the potential for diminished returns as funds manage increasing capital. This suggests a need for continued innovation and differentiation in the hedge fund industry. The strong performance of Tiger Cubs in 2024 demonstrates the enduring appeal of skilled stock picking in a dynamic market environment.
