Tiger Global Hedge Fund Plunges as Tech Boom Wanes
April 06 2016 - 3:20PM
Dow Jones News
Charles "Chase" Coleman, the hedge-fund manager famed for his
early bets on startups including Facebook Inc. and Zynga Inc., has
suffered big losses this year as the technology boom wanes,
according to people familiar with the matter.
Mr. Coleman's Tiger Global hedge fund plunged 22% in the first
quarter, making it one of the industry's worst performers this
year, the people said. The losses amount to more than a billion
dollars on paper for Tiger Global's hedge fund, and potentially
more for its larger private-equity and venture-capital
operation.
The average stock-focused hedge fund was down around 3% through
the end of March, according to researcher HFR Inc.
Tiger Global's three largest stock investments—retailer
Amazon.com Inc., video-streamer Netflix Inc. and Chinese e-commerce
firm JD.com Inc.—are down big this year. They comprised nearly half
of its portfolio at the start of the year.
Tiger Global also maintains stakes in private companies that are
at risk in a cooling environment for technology startups, such as
Indian e-commerce firm Flipkart and transportation service Uber,
said people familiar with the situation. And it has a number of
less-liquid, or less easily tradable, positions in China, one
person said.
The Wall Street Journal reported last month that some investors
in Flipkart slashed their valuations of the company as much as 23%.
Uber's valuation has held mostly steady so far, according to The
Wall Street Journal Startup Stock Tracker.
Until this year, Mr. Coleman had one of the more enviable track
records in the hedge-fund world.
A former Williams College lacrosse player and a descendant of
New York founder Peter Stuyvesant, Mr. Coleman got a job working
for hedge-fund veteran Julian Robertson, who was the father of one
of his childhood friends. He later struck a deal with Mr. Robertson
for financial backing to start his own firm in 2001 in exchange for
a cut of fees earned going forward.
Mr. Coleman earned his own reputation on Wall Street with
prescient investments in technology companies such as LinkedIn
Corp. Tiger Global's hedge fund gained 7% and 17%, respectively, in
2015 and 2014. Since inception, it has produced an average
annualized return of more than 20%, said one of the people familiar
with the matter.
Over the past year, however, Tiger Global, with $20 billion
under management firmwide, has increasingly been concentrating its
hedge-fund portfolio in a handful of names. That strategy has
proven painful thus far in 2016.
Tiger Global uses leverage, or borrowed money, to nearly double
the roughly $6.5 billion in its hedge fund, the person said.
Write to Rob Copeland at rob.copeland@wsj.com
(END) Dow Jones Newswires
April 06, 2016 15:05 ET (19:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Linkedin Corp. Class A (NYSE:LNKD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Linkedin Corp. Class A (NYSE:LNKD)
Historical Stock Chart
From Jul 2023 to Jul 2024