Tiger to Close Flagship Jaguar Fund

NEW YORK — Tiger Management, the once highflying hedge fund manager that roiled global markets with huge stock and currency bets, will close its flagship Jaguar fund Friday to stem losses from ill-timed stock picks, industry sources said. The hedge fund firm, led by industry veteran Julian Robertson, will close the doors on the Jaguar fund after tumbling from $22 billion in total assets to about $6.5 billion in 18 months as a string of bad stock picks piled up losses and angered investors.

Tiger will return money to investors in Jaguar and is still exploring options to sell its other funds, including Ocelot and Puma, said people dealing with the fund.

Hedge funds are loosely regulated investment pools for wealthy individuals and institutions and often borrow to make large market bets.

Robertson, 68, decided to shut down Jaguar after a series of negotiations with other hedge funds, including Maverick Capital Ltd., over the last few weeks failed to produce a possible merger or affiliation, the sources said.

The closure would mark the second huge U.S. fund brought to its knees since the 1998 global markets crisis. The Long-Term Capital Management fund nearly collapsed in fall 1998.

Whereas Long-Term collapsed from bad bets in bond markets, Tiger’s problems have come from the stock market, with the fund hemorrhaging losses from its huge 22% stake in US Airways.

Tiger’s decision to shutter the fund was in all likelihood forced by the fund’s inability to recoup last year’s losses, which it must do before it can earn the 20% fee from investors, partly needed to pay its employees, sources said.

Started in 1980 with about $8 million in assets, Tiger grew in stature as Robertson gained a reputation as an astute stock picker. In 1996, Jaguar posted gross returns of 50% and a whopping 72% return in 1997.

But in recent months, Robertson appears to have lost his golden touch. Jaguar shed 4.1% in 1998 as the fund bet against Japanese and Hong Kong stocks and other Asian currencies. Losses mounted in 1999 and investors started pulling out money, prompting a restructuring to limit withdrawals last December.

Jaguar is down 13.8% this year.

Robertson was slow to invest heavily in technology stocks and then made some ill-timed picks, investors said.

Despite the steep losses in recent years, Tiger still boasts one of the best track records in the industry, with average annual returns of 26% since its founding.

Robertson is revered by his peers as a savvy stock picker who sometimes makes large bets on currencies and bonds. He has trained a generation of hedge fund managers.

“It’s been one of the best hedge funds in history. It’s sad it is closing down after a period of under-performance,” said Alex Shogren, president of HedgeFund.net.