Tiger Global’s flagship hedge fund was dealt a contemporary blow in April and is now down greater than 40 per cent this yr, within the newest signal of how star buyers who rode the large rally in tech shares have been wrongfooted by a pointy pullback.
The losses mark a dramatic fall from grace for Tiger Global’s founder Chase Coleman, who has emerged as one of many world’s most distinguished progress buyers after founding the agency in 2001.
Tiger Global’s hedge fund misplaced 15.2 per cent in April, in accordance with an individual acquainted with the matter, taking it down 43.7 per cent within the first 4 months of 2022. This yr’s losses and a 7 per cent reversal in 2021 imply that the Tiger Global hedge fund’s achieve of 48 per cent in 2020 has been fully erased.
The group’s long-only fund misplaced 24.9 per cent in April and is down 51.7 per cent in 2022, the individual mentioned. Together throughout the 2 funds, the agency managed round $35bn in public equities on the finish of 2021. Tiger Global declined to touch upon the efficiency numbers, which had been first reported by Bloomberg.
Last month was a depressing one for a lot of hedge funds, with each international bond and inventory markets shedding cash, as buyers fretted about excessive inflation pushing central banks into an aggressive rate of interest mountaineering cycle.
The so-called Tiger Cub hedge funds, spawned from Julian Robertson’s Tiger Management and large buyers in tech shares, have been hit significantly arduous in latest months, as a increase in high-growth know-how shares that was accelerated by the pandemic has become a bear market. This has put the brakes one of the vital profitable trades in recent times.
The Nasdaq Composite misplaced 13.3 per cent in April, its worst month-to-month efficiency since 2008. Despite a bounce in latest days, the tech-heavy benchmark has now fallen by almost 22 per cent since its November peak.
In a quick letter to buyers, the Tiger Global funding staff mentioned: “April added to a very disappointing start to 2022 for our public funds. Markets have not been co-operative given the macroeconomic backdrop, but we do not believe in excuses and so will not offer any.”
The letter added that the staff was persevering with to handle the portfolio within the methods it described in its first quarter letter. “[We] know we will look back on this as one point in time on a long journey,” it mentioned.
By the beginning of final yr, Coleman was ranked the 14th best-performing hedge fund supervisor of all-time, after a bumper yr in 2020 when he made $10.4bn of positive aspects for buyers, in accordance with analysis by LCH Investments. But a bruising few months meant he misplaced $1.5bn for buyers final yr, pushing him down the rankings even earlier than this yr’s fall.
This yr’s losses come as expectations of a pointy rise in rates of interest have pushed buyers out of shares with excessive charges of progress however little in the best way of earnings. Higher rates of interest make such corporations’ future money flows look comparatively much less engaging.
Other high-profile casualties amongst progress buyers embrace Baillie Gifford’s Scottish Mortgage Investment Trust and Cathie Wood’s flagship Ark Innovation ETF, each of which have nursed large losses previously 12 months.
Tiger Global can also be a prolific investor in non-public markets and holds stakes in additional billion-dollar non-public start-ups than some other agency, in accordance with CB Insights. It has just lately gained notoriety for one thing else: a fast-paced fashion of investing that has unsettled the clubby ranks of Silicon Valley enterprise capitalists.