When global markets were selling off last month, Tiger Global Management shrewdly stepped in and bought what it deemed “attractive” situations. The move paid off. The New York-based hedge fund firm, founded by Tiger Cub Charles (Chase) Coleman III, posted a 5.4 percent gain in October in its main hedge fund, a month in which there was a huge differential between winners and losers. As a result, the hedge fund — managed by Feroz Dewan — is up 16.2 percent for the year, further cementing Tiger Global’s status as one of the premier firms managed by the younger generation of Tiger Cubs.
Entering October, Tiger Global’s hedge funds, which managed about $6.9 billion, were 136 percent long and 71.8 percent short, for a gross exposure of 207.8 percent and a net long exposure of 64.2 percent in the firm’s public equity portfolio, according to its September 30 exposure report, obtained by Alpha.
Media and Internet stocks comprised the bulk of its net exposure. Tiger Global was between 13 percent and 14 percent net short in both health care and technology. In fact, it had more individual short positions (42) than longs (38).
However, in a separate third-quarter commentary dated October 31, the firm told clients that “in recent weeks” it added to positions that “increased in attractiveness,” especially among longs. At the same time, it replaced positions “that have performed better and have relatively less compelling return prospects.”
The firm did not name specific stocks it bought or sold. But it emphasized in the report that “It is during these periods of higher volatility that we try to expand our time horizon and capitalize on opportunities presented by short-term, sentiment-driven fluctuations in stock prices.”
Meanwhile, the firm’s long-only fund — Tiger Global Long Opportunities — has had a pretty good year as well, despite a big setback in the third quarter, when it lost 5.1 percent, hurt mostly by Internet and consumer stocks. For the first three quarters, it was up 12.1 percent. It’s not known how the fund fared in October.
The hedge fund firm’s best performer in the third quarter was Chinese e-commerce giant Alibaba Group Holding, which went public in late September. We’ve reported in the past that Tiger Global had an Alibaba position. “Given China’s fragmented offline retail footprint and the increasing adoption of mobile commerce, we remain excited about the long-term growth prospects of many e-commerce businesses in China, including Alibaba,” the hedge fund firm stated in its third-quarter report.
