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First-week student schools Tiger Cubs
Meeting Weston Hicks
Todd Combs arrived at Columbia from Progressive, a company that did not hold earnings calls, which was unusual then. Two general managers he had worked with told him Wall Street was dying for information about it, and they connected him with Weston Hicks, the top insurance analyst of the day. Hicks wanted to know why he had left, and on hearing he wanted to be an investor, pointed him to the Tiger Cubs.
What the funds lacked
Tiger Cubs are the funds that spun out of Julian Robertson's Tiger Management, and the four big ones were Blue Ridge, Viking, Maverick, and Lone Pine. They were doing heavy work on the insurance industry and were short companies they believed were frauds, but they could not prove it well enough to enlarge their positions. They knew investing, and they did not know insurance filings.
He knew how to tear apart statutory blanks and yellow books, the geeky insurance filings. He walked in asking where they were, told the funds to pull this one and that one, and laid out the map and the terrain, putting the puzzle pieces together until the fraud was plain. Their instincts had been right, reached from a different direction, and the companies did go bankrupt.
Where it led
Hicks went on to become CFO of Chubb and then CEO of Alleghany, which Berkshire later bought. Combs ended up working with Blue Ridge, where Pete Daniker, a former Morgan Stanley banking analyst, became a mentor who gave him far more time than he ever gave back.
Why do insurers file separate regulatory reports?
State insurance regulators require insurers to file annual statements using statutory accounting principles, which are set by the National Association of Insurance Commissioners. These rules focus on whether an insurer could pay its claims if it were wound down, rather than on earnings. For example, assets such as furniture and equipment are not counted at all. The filings also list reserves, investments, and reinsurance in detail.
How did Tiger Management spawn so many funds?
Julian Robertson founded Tiger Management in 1980 and built it into one of the largest hedge funds, which peaked near $22 billion in 1998, according to press accounts. He backed former analysts as they launched their own funds, and those funds became known as Tiger Cubs. Stephen Mandel's Lone Pine, Andreas Halvorsen's Viking, Lee Ainslie's Maverick, and John Griffin's Blue Ridge all came from that lineage. Tiger Management itself closed in 2000 after heavy losses.
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