| Feroz Dewan of Tiger Global (Bloomberg) |
Tiger Global Management‘s hedge funds extended their losses for the year in March in what has been mostly a strong first quarter for its competitors.
The New York firm’s funds, overseen by Feroz Dewan, lost 2.9 percent in March, bringing their loss for the first quarter to 5.3 percent. This is in contrast to many other long-short managers, including fellow Tiger Cubs, who have posted robust gains in the first three months.
We earlier reported that Greenwich, Connecticut–based Viking Global Equities rose 4.8 percent, Viking Long Fund surged 6.5 percent, while Viking Global Opportunities, launched on January 1, increased 5.3 percent.
The Greenwich, Connecticut–based hedge funds and long-only funds managed by Stephen Mandel Jr.’s Lone Pine Capital grew between 5 percent and more than 6 percent.
New York–based Valinor Management, headed by David Gallo, posted a 4 percent gain in the quarter.
In fact, the only other prominent hedge fund to report a loss is David Einhorn’s New York–headquartered Greenlight Capital, which lost 2.6 percent in March and 1.8 percent in the quarter.
The average hedge fund rose 3.2 percent in the first quarter, according to Lyxor’s Managed Account Platform research team.
Hedge funds these days account for a minority of assets at Tiger Global Management, founded by Charles (Chase) Coleman III. The firm currently has more than $20 billion under management, including more than $10 billion in its venture capital/private equity business. The rest of the money is in hedge funds and long-only funds.
Last year Tiger Global’s hedge funds rose 17.1 percent, much better than the 13.7 percent gain for the Standard & Poor’s 500 (including reinvested dividends) and well ahead of the bulk of hedge funds.However, Tiger Global lost 3.1 percent in December, meaning that it is actually down more than 8 percent over the past four months.
Of course, Tiger Global has proven in the past that it can turn around lackluster results in a few months. Last year its hedge funds were up only about 0.5 percent through April, before taking off.
It is not known exactly which investments contributed to the losses this year.
In its fourth-quarter letter to clients, Tiger Global said one of its most important themes is consumer Internet, “most notably” e-commerce and online classifieds. Most of the current exposure to consumer Internet comes from investments in Chinese companies.
Its largest play on this theme is a stake in Autohome, a Chinese online auto portal. It was up more than 20 percent in the first quarter and more than 4 percent on Wednesday alone.
The investor letter also notes that high-speed broadband is another theme in the portfolio.
According to regulatory filings, Tiger Global’s top three holdings accounted for 22 percent of its U.S. equity assets at the end of December: Twenty-First Century Fox, MasterCard International and Alibaba Group Holding.
In the first quarter, Twenty-First Century Fox slid about 12 percent, while Alibaba dropped some 20 percent. MasterCard, however, slipped only slightly. And TransDigm Group, its fourth-largest position, rose 11 percent.
However, Bitauto Holdings, another Chinese auto-oriented website and Tiger Global’s fifth-largest holding, lost 27 percent in the first quarter. Keep in mind, however, that the stock is up more than 7 percent this month, underscoring the volatility of Tiger Global’s portfolio.
The first quarter is far from indicative of how the rest of the year will fare. One thing is clear, however. Tiger Global has hitched its fate to Internet stocks, many of them based in China and other emerging markets.
