Tiger Global’s effort to regain its prior prominence in the world of hedge funds and venture capital — following losses of more than $60 billion after the technology bubble burst in 2022 — is still in comeback mode.
“If you feel like it’s been a bit of a walk through the desert, so do we,” said Tiger Global founder Chase Coleman, commenting on the dearth of IPOs during a recent — and rare — private call with investors. (“It’s been a little while since we’ve done something like this,” Coleman said.) Institutional Investor has obtained a transcript of the call, billed as the “Tiger Global 2023 review and 2024 outlook.”
Tiger Global declined to comment.
IPOs are one of the main ways VCs monetize the gains on the companies they own. In the past two years, only three of Tiger’s privately held companies managed to go public each year, compared with 38 in 2021.
He said that more than 20 percent of the portfolios in those vintage years are “performing poorly.” Moreover, while “every vintage year up through 2020 was positive,” he said, “2021 and 2022 are the tougher vintage years.”
Tiger Global raised its biggest fund in 2022, garnering $12.7 billion, and another one for $6.65 billion in 2021, according to PitchBook. Coleman said he wished Tiger Global had “invested a bit less” during those two years.
Last year, however, the firm had one big VC winner: India-based e-tailer Flipkart. After leading 15 rounds of investments in Flipkart, Tiger Global made a profit of $3.5 billion when it sold its stake to WalMart, according to Coleman. Kalyan Krishnamurthy, formerly a Tiger Global employee, is now the company’s CEO.
Flipkart has long been an investment that Tiger Global has touted and which was made years ago, in Tiger funds five through nine. (Tiger Global has raised 15 VC funds.) The investment was led by Lee Fixel, a former partner who left in 2020 to start his own firm.
Last year Coleman took charge of its private investments. Scott Shleifer, who was the architect of Tiger Global’s VC effort, stepped down as the head of private equity in November though he remains at the fund, as was previously reported by The Information. In mid-2022, another high-profile partner in the VC arm, John Curtius, left the firm.
Coleman said he leads a recently established investment committee that consists of five senior team members. “I’m the final decision maker,” he added.
Tiger Global now has about $33 billion in the private funds’ portfolio, according to Coleman. Overall, about 20 percent of the portfolio companies are “performing poorly” though that percentage is higher in the more recent funds, he said. The best performers are “the investments we’ve made in artificial intelligence,” he noted. (According to a Nov. 10, 2023, ADV filing with the SEC, the entire firm had $58.5 billion in regulatory assets under management, roughly half that at its height at the end of 2021.)
The world looks better to Tiger Global on the public side, according to Coleman. Its hedge funds logged double-digit returns last year. Coleman said while it has not raised any new money in its hedge funds, “the redemptions were fairly limited in the single digit percentages.”
Last year, its flagship hedge fund, Tiger Global International, beat the stock market with a 28 percent return — but still a long way from meeting its high-water mark after losing more than 50 percent in 2022. Coleman said Tiger Global’s short positions “went against us 11 percent.”
The hedge fund has also invested in several AI-related companies, and has long been a champion of the technology. “We think this has the potential to be the biggest and most deflationary theme we have encountered,” Coleman said. “You’re automating knowledge workers. We’re seeing coding assistance for software developers drive huge gains.”
“This whole ecosystem has been very active and it’s evolving very quickly,” he continued. “We think that the hyperscalers are well positioned to compound their existing advantages. This has underpinned our investments in these companies for quite a while. They have talent, they have infrastructure, they have capital, and this stuff is really expensive.”
Tiger Global’s hedge fund top holdings included Meta, Microsoft, Google, Amazon, and Nvidia at the end of 2023. But despite the runup in those stocks, he said, “we don’t feel like we’re in bubble territory yet.”
Tiger Global also uses AI at home. “We have in-house bots to summarize text for things like meeting prep. We have ways of tracking talent that we then can auto-gen emails to reach out to portfolio companies,” he said.
While there have been some high-profile departures, Coleman said it’s been “at least a couple of years” since “someone turned down an offer to work at Tiger Global on our investment team.”
And despite all the negative media attention Tiger Global received in 2022, when it posted such gargantuan losses, Coleman was sanguine. “In some cases, it [the media] felt we performed poorly. It didn’t feel completely undeserved.”
