Tiger Cubs vs Pods: not so different anymore?

I spoke to a Tiger Cub analyst and Tiger Cubs are more "pod-leaning" than ever...

Tiger Cubs (Viking Global, Lone Pine) claim to be in the middle of value funds (think Warren Buffet, Seth Klarman) and multi-managers (Citadel, Millennium, Balyasny) in their investment approach and holding period, but surprisingly they now resemble pods more than ever.

I recently had a conversation with a large Tiger Cub analyst and my takeaway is that they are more “pod-leaning” than ever. I will explain why. Much of what we talk about with regards to pods really now applies to Tiger Cubs as well.

Before that, in our previous post we talked about how earnings are increasingly being pre-traded weeks in advance based on intraquarter data points. There is a lot of ground to cover and nuances to discuss, but yet another important takeaway to mention is this: you still want to participate in actual earnings but sized differently. For data-heavy names, top PMs whose process and style is heavily focused on the next earnings print, typically start building the position earlier in the quarter but are positioned very differently by earnings day as much of the alpha has already decayed (remember the alpha curve).

Also, AlphaSense, the platform nearly all hedge funds use for market intelligence, is hosting a webinar on May 21 at 12 PM ET on the future of cloud compute and data centers with Patrick O’Shaughnessy, AlphaSense’s Director of TMT Research and a former AWS Executive. We recently sketched out the unit economics of Microsoft and we will also soon be diving into Google’s unit economics and the nuances of modeling its search and cloud businesses. This could be very helpful color on the infrastructure buildout for AI workloads, which flows directly into Microsoft Azure and Google Cloud’s IaaS and security-related revenues.

If you are interested, you can sign up to attend for free here.

Onto our topic: it’s incredible how much Tiger Cubs, and single-managers more broadly, have changed their process in response to the brutal 2021 and early 2022 drawdowns, when many long-duration growth-heavy portfolios got crushed as rates spiked and market regimes shifted.

Capital flowed into pods, away from single-managers… and now it feels like the single-managers themselves are flowing into pods. Full circle.

Let’s get straight into it.