Hound Partners, a hedge fund founded by Jonathan Auerbach in 2004, has initiated legal action against Tiger Management.
The lawsuit claims that Tiger has breached its marketing obligations, which were crucial to the partnership.
Hound alleges that Tiger's marketing support has significantly declined over the years, with a notable decrease in referrals since 2016.
The lawsuit argues that Hound has the right to terminate the agreement due to Tiger's failure to provide adequate marketing support.
Despite the legal disputes, Hound Partners has reported impressive performance metrics for its hedge funds.
The firm is also launching a new fund, the Hound Partners 167 Fund, which has shown strong back-tested returns.
Hound's core strategy involves short-selling and maintaining a portfolio of 30 to 40 short positions.
The firm also engages in long exposure through futures contracts and exchange-traded funds.
Tiger Management has filed a counter-lawsuit, asserting that Hound's claims lack legal merit and that it has not breached the contract.
The resolution of this legal battle will have significant implications for both Hound Partners and Tiger Management.
Hound's ability to attract capital and maintain its growth trajectory may depend on the outcome, while Tiger's reputation and financial interests are also at stake.