US hedge fund Tiger downs shutters

Robertson, a legend in the hedge fund world for his stock-picking acumen, said he decided to close the funds after steep losses suffered by investments in so-called quot;old economyquot; stocks that were left behind as technology issues powered ahead.

quot;The result of the demise of value investing and investor withdrawals has been financial erosion, stressful to us all. And there is no real indication that a quick end is in sight,quot; Robertson said in his letter. Tiger8217;s assets tumbled from 22 billion to 6.5 billion in 18 months.

Robertson, Tiger8217;s chief executive, will retain his stake of more than 20 per cent in the company and manage its remaining assets, while other partners are free to take out their stake. The hedge fund firm will retain its holdings in US Airways, trucking company Extra, computerized lottery provider GTECH Holdings Corp, United Asset Management and Australian company Normandy Mining.

Tiger8217;s huge 22 per cent stake in US Airways has been an albatross holding down the fund8217;s performance as the stock plunged 44 per cent over the past year. The fund8217;s closure brings to an end two decades of stellar returns matched by few in the money management world.

Although ending the fund8217;s 18-year run on a down note, Robertson said in the letter to his partners that the hedge fund had logged one of the best performances, with a compounded annual 31.7 per cent rate of return. quot;No one had a better record,quot; Robertson said.

Robertson quot;had a phenomenal return for 20 years. People are focusing so much on the last 18 months,quot; Stanley Druckenmiller, managing partner at hedge fund Soros Fund Management, told Reuters. quot;He is more than replaced by all the people he has mentored,quot; said Druckenmiller, referring to a slew of successful hedge fund managers that came out of Tiger.

The ageing Robertson said he regretted not having closed the fund earlier, when Tiger was at its peak. quot;No one wishes more than I that I had taken this course earlier. Regardless, it has been an enjoyable and rewarding 20 years,quot; he said.

Robertson founded Tiger in 1980 with 8 million in assets. Tiger grew in stature as Robertson gained a reputation as an astute stock picker. In 1996, Jaguar posted returns of 50 per cent, followed by a whopping 72 per cent in 1997.

The performance turned sour after an expensive and massivebet against Japanese stocks and the Japanese yen. Then, as Robertson stuck by quot;old economyquot; stocks, his performance lagged technology stocks. Investors said Robertson8217;s decision was prompted after several well-known analysts deserted the firm.

Investment managers in Asia said Tiger8217;s demise was caused by bad stock picking and the belief of the funds8217; managers that the Internet-based New Economy was a passing phase. quot;If you8217;re stuck with an Old Economy view of the world8230; you8217;re in trouble because things are changing too quickly,quot; Konyn said.