Blue Ridge Capital
From Wikipedia, the free encyclopedia
Blue Ridge Capital is an American
hedge fund founded in 1996 by "Tiger Cub" John Griffin, a protege of
Julian Robertson, and 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]
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 is 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 goes public on the NYSE as an
ADR ticker symbol XIN. It traded north of $15 per share but has
floundered and settled between $1-$3 range lately.
[8]
References
- ^ BLUE RIDGE CAPITAL HOLDINGS LLC FORM 13F. February 16, 2010
- ^ "How to Invest Like Blue Ridge Capital's John Griffin". Seeking Alpha. 2007-07-06. Retrieved 2010-03-13.
- ^ "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.
- ^ "Blue Ridge Capital China Acquires Tunhe Industry and Trade". AsiaInfo Services. 2008-04-18.
- ^ Whiting, Dominic (2008-02-18). "Blue Ridge raises $1.45 bln for China private equity". Private Capital (Reuters). Retrieved 2010-03-13.
- ^ a b GuruFundPicks, [Analysis of Top New Conviction Buys and Sells by Tiger Cub and Guru John Griffin http://seekingalpha.com/article/274261-analysis-of-top-new-conviction-buys-and-sells-by-tiger-cub-and-guru-john-griffin], June 10, 2011
- ^ a b Hedge Fund Newsletters, "Blue Ridge Capital
- ^ "Blue Ridge Raises $1.45 Billion for China Deals". The New York Times. February 20, 2008. Retrieved March 24, 2010.
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