Julian Robertson’s biography: What is his investment style?

“The bubble has burst in our face and the causes have been the excess of human greed and miscalculations by financial institutions.”

Julian Robertson

A family sabbatical year in New Zealand was what Julian Robertson needed to clear his head and decide to start what would become one of the first and most successful hedge funds in history.

The beginnings

Robertson grew up in a wealthy family, the son of a textile executive, with no more complications than those of an average child. He entered the University of North Carolina.

Upon completing his studies, Robertson decided to enter the Army, where he served in the U.S. Navy for two years, where, he says, he learned the value of discipline.

He moved to New York and began working as a stockbroker at Kidder, Peabody & Co., where he continued his career for the next twenty years, eventually becoming head of asset management.

The big decision

In 1980, at the age of 47 and after spending a year “resting” in New Zealand, Robertson decided to start managing funds on his own, and founded Tiger Management Corporation, which would become one of the world’s first hedge funds.

Tiger’s start-up capital was $8,000,000 from friends and acquaintances. Over the next few years, Robertson made a name for himself for his keen investment and money management acumen.

In 1987, he was one of the few who foresaw the stock market crash and promptly traded his U.S. stocks for foreign securities, thus circumventing Black Monday. 

Another of his feats as an investor is the incredible 80% return in a single year, in 1993, thanks to a very successful bond deal. By 1996, Tiger Management Corporation’s initial capital had become $7.2 billion, and by 1998 Tiger’s total assets were valued at $22.8 billion.

The turnaround he couldn’t understand

1994 was the beginning of the end for Tiger Management Corporation, that year Robertson decided to change investment strategy and focus on buying currencies and bonds, in imitation of George Soros’ strategy. However, the company posted a loss in the first quarter of that year of 12%, which led to an outflow of investors from the fund.

In 1995, although it was a profitable year, profits were well below the average of the major stock market indexes and only because it managed to capitalize on short positions in copper futures. This pair of failed years cost Robertson $800 million in investor outflows.

Although the next few years continued without major setbacks, 1999 was a year of unfortunate events and large losses. Betting against the Japanese interest rate or on unsettled short-term Russian bonds cost Robertson nearly $2.6 billion.

The market was still moving and changing around new technologies, and Robertson made the decision to bet against the trend when it indicated the bidding of technology companies. This mistake cost him $6 billion between 1999 and 2000.

In April 2000, after confessing his lack of understanding of the modern market, which, according to him, does not act under a logical dynamic, he decided to close his six funds and return the remaining capital to retire from Wall Street.

What is his investment style?

In his prime, Julian Roberson could boast of his great ability to find hidden numbers in financial statements and make the best investment decisions.

In addition, he always made sure that at Tiger Management Corporation, only the best people were employed to provide ideas and analysis beyond the number sheets.

Julian Robertson today

In retirement, Robertson continues to invest his capital in venture funds created by the people he trained. He has an estimated personal fortune of $4.4 billion and is an active philanthropist and supporter of various social and educational causes.

His legacy of ups and downs around phases of openness to ideas and the closed-mindedness of hubris are lessons that remain for all investors to heed in order to learn how to make the best decisions.