Tiger Cubs Score Second Year of Gains on Soaring Tech Stocks

New York: Hedge funds tied to the late Julian Robertson are on a roll. They’ve seen double-digit gains for the second year in a row, bouncing back from a rough 2022.

Thanks to soaring tech stocks, Lone Pine Capital, one of the Tiger Management offshoots, racked up a 36% gain last year. Tiger Global Management wasn’t far behind with a 24% increase. Coatue Management also did well, returning about 19%.

Meta Platforms was a big winner for these funds, jumping 65% last year. It’s interesting to note that a handful of tech companies, like Nvidia, Apple, and Amazon, were key players in the S&P 500’s overall 23% gain.

Looking ahead, equity-focused hedge funds are having their best year in over a decade, with an average return of 14.7% through November. That’s a solid performance, according to data from PivotalPath.

Some funds, like Contour Asset Management, managed to shine even without heavy tech investments. They saw a whopping 47.8% rise last year, thanks to some smart short bets.

David Rosen’s Rubric Capital really stole the show with an 81.5% surge. Their biggest holding, Talen Energy, saw its shares more than triple in value as demand for electricity surged.

Meanwhile, Dan Sundheim’s D1 Capital Partners enjoyed a 44.6% increase, although most of their assets are in venture capital rather than just stock picking.

Interestingly, a recent Bank of America survey suggests that stock-picking hedge funds will be the go-to strategy for investors in 2025. About 38% of them plan to invest in equity long-short funds.

However, there’s some concern among investors about too many firms chasing the same stocks, which could lead to lower returns as they try to deploy more capital.