Blue Ridge Capital

Blue Ridge Capital Holdings, LLC
Private
Industry Investment management
Founded 1996
Founder John Griffin
Headquarters New York City, New York, U.S.
Products Hedge funds
Total assets $5.3 billion[1]

Blue Ridge Capital is an American hedge fund founded in 1996 by "Tiger Cub" John Griffin, a protege of Julian Robertson, which invests globally.[2][3][4][5]

Background

The founder of Blue Ridge Capital, John Griffin, is believed to have been a "right-hand man" to the billionaire manager Robertson.[6] Blue Ridge Capital generally targets "absolute returns" by investing in and short-selling companies, with a focus on "going long" (i.e. buying the stock of companies rather than selling it short.) Blue Ridge's investment thesis is based on fundamental analysis, and focuses on companies that have competitive advantages in their industries, while shorting those thought to have "fundamental problems." The principal, Griffin, is highly compensated and after a 65% return on the fund in 2007 he reportedly made $625 million.[6] That was their best year, however: after surviving the financial crisis with a loss of only 8%, the fund has since underperformed the S&P 500.[7][8]

Investment process

Blue Ridge has a lengthy process for vetting both long and short investments. Generally, they are focused on individual companies rather than a sector; a "checklist methodology" is used to identify good performers in a given category. Industry outlook is also taken into account in the investment process. Key factors in the consideration of industry-relevant matters are the power of stakeholders, barriers to market entries, ingredients of success, and business development opportunities. Analysts at Blue Ridge also need to address the business model, the management, the financial structure, and the risks of the company they're considering; a detailed time line is also created, which attempts to pin down catalysts for a changed valuation in the share price.[7] A prospective investment must also be evaluated for the presence of questionable accounting practices.

Joint ventures

In 2008, Blue Ridge Capital's division in China started a joint venture with Equity International investing in Xinyuan Real Estate. In December 2007, Xinyuan Real Estate went public on the NYSE as an ADR ticker symbol XIN. It traded slightly above $15 per share but settled between $1–$3.[9]

References

  1. ↑ BLUE RIDGE CAPITAL HOLDINGS LLC FORM 13F. February 16, 2010
  2. ↑ "How to Invest Like Blue Ridge Capital's John Griffin". Seeking Alpha. 2007-07-06. Retrieved 2010-03-13.
  3. ↑ "Hedge Fund Blue Ridge Capital Buys McDonald's Corp., Green Mountain Coffee Roasters Inc., Charles Schwab Corp., Sells Whole Foods Market Inc., Exterran Holdings Inc., Palm Inc.". GuruFocus.com. 2010-02-16. Retrieved 2010-03-13.
  4. ↑ "Blue Ridge Capital China Acquires Tunhe Industry and Trade". AsiaInfo Services. 2008-04-18.
  5. ↑ Whiting, Dominic (2008-02-18). "Blue Ridge raises $1.45 bln for China private equity". Private Capital (Reuters). Retrieved 2010-03-13.
  6. ↑ 6.0 6.1 GuruFundPicks (June 10, 2011). "Analysis of Top New Conviction Buys and Sells by Tiger Cub and Guru John Griffin". Seeking Alpha.
  7. ↑ 7.0 7.1 Hedge Fund Newsletters, "Blue Ridge Capital
  8. ↑ Symmetric: Investment Manager Skill Evaluations, Blue Ridge Capital
  9. ↑ "Blue Ridge Raises $1.45 Billion for China Deals". The New York Times. February 20, 2008. Retrieved March 24, 2010.