Blue Ridge Capital was an American

hedge fund A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as sho ...

founded in 1996 by John Griffin, a "

Tiger Cub The tiger (''Panthera tigris'') is the largest living Felidae, cat species and a member of the genus ''Panthera''. It is most recognisable for its dark vertical stripes on orange fur with a white underside. An apex predator, it primarily pr ...

" (protégé of

Julian Robertson Julian Hart Robertson Jr. (June 25, 1932 – August 23, 2022) was an American billionaire hedge fund manager, and philanthropist. Robertson founded Tiger Management, one of the first hedge funds, in 1980. From its inception in 1980 to its 1 ...

Tiger Management Tiger Management Corp., also known as "The Tiger Fund", is an American hedge fund and family office founded by Julian Robertson. The fund began investing in 1980 and closed in March 2000/01. It continues to operate today in direct public equity ...

), which invested globally.

Background

The founder of Blue Ridge Capital, John Griffin, is believed to have been a "right-hand man" to the billionaire money manager

. Blue Ridge Capital generally targeted "absolute returns" by investing in and

short-selling In finance, being short in an asset means investing in such a way that the investor will profit if the value of the asset falls. This is the opposite of a more conventional "long" position, where the investor will profit if the value of the ...

companies, with a focus on "going long" (i.e. buying the stock of companies rather than selling it short.) Blue Ridge's investment thesis was based on

fundamental analysis Fundamental analysis, in accounting and finance, is the analysis of a business's financial statements (usually to analyze the business's assets, liabilities, and earnings); health; and competitors and markets. It also considers the overall state ...

, and focused on companies that have

competitive advantage In business, a competitive advantage is an attribute that allows an organization to outperform its competitors. A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled ...

s in their industries, while shorting those thought to have "fundamental problems." The principal, Griffin, was highly compensated and after a 65% return on the fund in 2007 he reportedly made $625 million.

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 A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...

, 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.Hedge Fund Newsletters,
Blue Ridge Capital
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 Equity International is a private equity firm founded by Sam Zell to invest in real estate in markets outside of the United States. Since its founding in 1999, it has invested in 28 companies. Investments In 2002, Equity International invested $3 ...

investing in

Xinyuan Real Estate Xinyuan Real Estate Co., Ltd. () is a Chinese real estate company. Xinyuan has traditionally engaged principally in residential real estate development and the provision of property management services, focusing on Tier II cities in China. Hist ...

. 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.

Political activities

Blue Ridge donated $100,000 to

Restore Our Future Restore Our Future is a political action committee (PAC) created to support Mitt Romney in the 2012 U.S. Presidential election. A so-called Super PAC, Restore Our Future is permitted to raise and spend unlimited amounts of corporate, union, and ...

, the Super PAC supporting

Mitt Romney Willard Mitt Romney (born March 12, 1947) is an American politician, businessman, and lawyer serving as the junior United States senator from Utah since January 2019, succeeding Orrin Hatch. He served as the 70th governor of Massachusetts f ...

's presidential candidacy.

Closure

Griffin shut Blue Ridge Capital in December 2017.

References

Tiger Cub firms Financial services companies established in 1996 Hedge fund firms in New York City Investment management companies of the United States Privately held companies based in New York City {{US-finance-company-stub