It’s no secret that a growing number of hedge fund firms with roots going back to Julian Robertson Jr.’s Tiger Management Corp. are investing in private companies.
On Tuesday three of them teamed up on the same deal.
Greenwich, Connecticut–based Viking Global Investors, New York–based Valinor Management and New York’s Tiger Global Management agreed to participate in the $175 million Series D funding round for Credit Karma, according to an announcement made by the company.
The online company provides free credit scores. Lenders pay Credit Karma in order to reach prospective customers.
According to Dow Jones, the company is now valued at $3.5 billion.
This is Tiger Global’s third investment in the company.
Tiger Global has been very active in the private area, having made roughly 20 private investments this quarter alone.
The firm makes these kinds of investments through its private equity/venture capital arm headed by Lee Fixel, who will soon become sole head of the more than $10 billion business. He has shared the position with Scott Shleifer, who will become head of Tiger Global’s public equity unit on July 1. Shleifer will remain actively involved in searching for attractive private investments.
The private investing operation is separate from Tiger Global’s hedge funds. Its various partnerships have much longer lockups than the hedge funds.
For its part, Viking recently participated in a $450 million private equity investment in Moderna Therapeutics, a biotechnology company that develops protein therapies based on messenger RNA technology.
In the first quarter of this year and fourth quarter of 2014, private investments accounted for 2.8 percent of the long equity gross exposure of Viking Global Equities, Viking’s long-short hedge fund. Private investments made up 1.7 percent in the third quarter of 2014 and 4.2 percent in the second quarter of 2014, according to the firm’s quarterly letters.
Earlier this year Viking raised $1.5 billion for a new fund, Viking Global Opportunities, a liquid-illiquid — or so-called hybrid — fund designed to accommodate illiquid securities.
“Changes in the marketplace, such as the delay in companies going public, demand that we remain active in the private space to enhance our public activities,” Viking said in its 2014 second-quarter letter when it announced the new fund. “We believe that we make better investment decisions across the board by studying new entrants and periodically investing in them although they may not be listed. We often find that private companies develop disruptive business models and new technologies that directly impact our public positions.”
At the time, Viking said the portfolio held seven unlisted companies — three of them investments made in the second quarter of 2014 — as well as one in restricted stock.
Valinor, headed by David Gallo, said earlier this year that it participated in a €4.5 million ($5 million) financing for Bondora, which is described as an online platform for fixed-income investments in European personal loans.
Valinor was also an early backer of Lending Club, an online broker of loans.
A number of other Tiger-related firms have varying degrees of involvement in private investments.
Private investments currently account for a little more than a quarter of the $2.4 billion or so in assets at Christopher Hansen’s San Francisco–based Valiant Capital Management. Through May its hedge fund — Valiant Capital Partners — posted a roughly 2.8 percent decline. However, its side pockets, or what the firm calls its portfolio of private investment, were up 5.3 percent or so through the same period.
New York–based Falcon Edge Capital, founded in 2012 by Richard Gerson, a founding executive at Blue Ridge Capital, has a side pocket portfolio valued at $206 million and invested in seven private companies, according to its May report to clients.
We reported earlier that Paul Hudson’s Glade Brook Capital Partners, a Tiger Grandcub because Hudson once worked for Tiger Cub Chris Shumway’s Shumway Capital Partners, launched two new funds designed to make targeted private investments: Glade Brook Private Opportunities Fund and Glade Brook Private Investors IV. At the start of the year, Greenwich, Connecticut–based Glade Brook had about $1.4 billion under management, including $755 million in private investments. Most of Glade Brook’s fundraising for private investments has come since the start of 2014.
Earlier this year, Lee Ainslie III’s Dallas-based Maverick Capital launched the Maverick Private Opportunities Fund. Its first close is anticipated for the end of January, according to people with knowledge of the firm.
And several years ago, Philippe Laffont’s New York–based Coatue Management launched the Coatue Hybrid Fund I, which also aims to invest in fledgling, pre-initial public offering companies.
