| Feroz Dewan, Tiger Global Management |
Tiger Global Management’s hedge funds extended their gains in November, making the New York–based, Tiger Cub–founded firm one of the best-performing hedge fund managers in an otherwise mediocre year for the asset class, according to an investor in the firm’s funds.
The investment firm, founded by former Tiger Management Corp. technology analyst Charles (Chase) Coleman III, meanwhile made another investment this week in its private equity and venture capital division’s burgeoning portfolio of private companies.
Interestingly, private equity accounted for 10.9 percent of equity investments in the firm’s three hedge funds — Tiger Global, its offshore counterpart and Tiger Global II. The hedge funds, managed by Feroz Dewan, gained 4.2 percent in November and are now up 21 percent for the year.
The net exposure of the public equity portfolio stood at 64.2 percent at the end of the third quarter, with media and Internet stocks comprising the bulk of the net exposure. However, it may not be very instructive to look at the firm’s holdings as of the end of the third quarter to determine what may have driven November’s results.
We earlier pointed out that in a separate third-quarter commentary dated October 31, Tiger Global told clients that “in recent weeks” it had added to positions that had “increased in attractiveness,” especially among long positions. At the same time, it replaced positions “that have performed better and have relatively less compelling return prospects.”
However, it is safe to say Alibaba Group Holding was still an important part of Tiger Global’s portfolio, and the stock jumped more than 13 percent last month. Twenty-First Century Fox, Tiger Global’s largest disclosed long equity position at the end of the third quarter, jumped 6.7 percent in November, while MasterCard, its second-largest position, rose 4.2 percent last month. Tiger Global boosted the number of MasterCard shares it owns by 120 percent in the third quarter.
Bitauto Holdings, the Chinese Internet company that specializes in the auto industry, jumped 10 percent in November. It was Tiger Global’s largest new position in the third quarter and its third-largest holding.
Meanwhile, Tiger Global recently announced it is launching a new Internet-focused long-only fund, Tiger Global Internet Opportunities, and an offshore counterpart on January 1, with a target size of $1 billion to $1.5 billion. The funds will be managed by Scott Shleifer, who started the firm’s private equity business and who the firm says has been leading its public Internet investment efforts for more than a decade. Tiger Global tells clients that its long investments in the Internet sector have compounded at 37 percent gross and 31 percent net since inception.
As for its latest private equity financing, the New York firm, along with Menlo Park, California, venture capitalist August Capital, led a $225 million Series D equity funding of AvantCredit, an online consumer loan provider. AvantCredit says in a press release that it plans to use the capital to “support the high-trajectory expansion of its loan portfolio, continue enhancing its data and analytics capabilities and bolster its lineup of top technology talent.”
This is Tiger Global’s seventh private investment this quarter alone, according to CrunchBase.com. The firm made 13 in the third quarter and at least 44 altogether this year, according to the database.
A large number of these investments are in Internet companies, many of them based in emerging markets.
The private equity and venture capital business is run by Shleifer and Lee Fixel.
Tiger Global manages $7.5 billion in the private equity and venture capital business. As of the end of September, it had $6.9 billion in long-short hedge funds and another $1.5 billion in long-only funds.
