Bloomberg’s analysis of managers’ earnings assesses just their major hedge and long-only funds, and excludes separate private equity vehicles. It also excludes investors with no outside capital, such as BlueCrest Capital Management’s Michael Platt.
Sarma, who came to the U.S. from India to get a master’s degree in operations research from Princeton University, joined Tiger Global a few months after its 2001 debut. He was considered the firm’s most talented non-partner, according to people who knew him at the time. He struck out on his own five years later, using his father’s initials as the name of his new firm.
The original plan was to invest in Indian private equity as well as global stocks, but he soon shifted almost entirely to public companies, especially technology shares.
Netflix Inc. became one of his biggest money-makers, with Sarma profiting when the stock soared and fell, investors said. His fund has booked annualized gains of about 12% since 2007, outpacing the S&P 500 Index’s 11%.
Sarma generally holds about 25 stocks he expects to gain and 35 he’s betting will fall, according to investors and regulatory filings, meaning his net exposure is generally lower than peers.
The Avis wager is unusual for him. It’s the largest and longest he’s made, and the only one where he -- or anyone else at the firm -- sits on a company’s board. Hedge funds generally avoid board seats because that limits when they can buy and sell shares.
Sarma has taken a long-term view that companies able to manage fleets of cars and trucks in a cost-effective manner will be extremely valuable in the future of human transport.
Despite that conviction, Sarma couldn’t resist taking a bit of a profit by selling about 5% of his holdings when Avis had its own meme-stock moment. The shares more than doubled on Nov. 2 after the firm announced it would play a big role in the adoption of electric vehicles in the U.S.
The jump in Sarma’s net worth was particularly large because the investment is spread across several of the firm’s portfolios, and he personally owns about 90% of one fund that only holds the Avis stake.
Sarma, now back in New York, is coming off a difficult January, along with many other stock-pickers. Avis slumped 15%. Even so, SRS’s main fund only lost 4.5% for the month, outperforming the S&P 500 and many other hedge funds.
--With assistance from Pratish Narayanan and Pierre Paulden.
This article was provided by Bloomberg News.