| Feroz Dewan (Bloomberg) |
Feroz Dewan is leaving Tiger Global Management at the end of June to start his own firm, according to a letter sent to clients of the hedge fund firm and obtained by Alpha.
The sort-of surprising development has set off major changes at the New York investment firm founded by Charles “Chase” Coleman III.
The departure of Dewan is a big setback to Tiger Global, the most successful of the five firms initially seeded by Julian Robertson, Jr., founder of Tiger Management.
In recent years, Tiger Global has emerged as one of the most successful hedge fund firms around.
Dewan, 38, manages the New York-firm’s hedge funds and long-only funds on a day-to-day basis. He recently made his debut on Alpha’s Rich List, ranking No. 16 with $260 million.
Tiger Global has long been sensitive to Dewan’s role at the firm, often making sure he got proper credit in press reports.
The firm is known for its large concentration of investments in Internet, technology and software companies. It has also made dozens of small investments in private Internet and other companies in the U.S. and emerging markets, especially India.
In conjunction with Dewan’s departure, Tiger Global announced that effective July 1, Tiger Global Internet Opportunities (TGIO), which was only launched in January, “will cease to exist” and will be merged into Tiger Global Long Opportunities (TGLO).
“Quickly after launching TGIO, we realized the challenge of aligning incentives properly across three public equity funds, as well as the long-term value of a simple structure where a single long-only fund mirrors the liquid long positions in TGI [Tiger Global Investments, the firm’s long-short funds],” Coleman concedes in a letter sent to clients. “We regret that it took launching TGIO for us to fully appreciate this, and we apologize for the inconvenience.”
TGLO has posted a 20 percent compounded annual growth rate since its launch 19 months ago, according to the letter.
TGIO is up 11 percent in the first four months of its operation.
Coleman says TGIO investors will be able to redeem all or a portion of their capital before the merger and will not be charged any incentive fees through June 30.
In the future, Tiger Global’s hedge funds and TGLO are expected to have “substantially similar” long portfolios, “with the primary exception being private and less-liquid securities where TGI will continue to have priority.”
Tiger Global is also reopening TGI and TGLO “to a limited amount of capital, primarily to replace any redemptions.”
Coleman also said the firm will “remain world-class in its short-selling efforts.”
In the letter to clients, Coleman says of Dewan: “We … are deeply grateful for all of his contributions to Tiger Global over his 12-year tenure, particularly during the past five years when he served as portfolio manager of our public equity funds and the last two and a half, when he ran Tiger Global’s public equity business.”
Scott Shleifer, who has been with the firm since 2002, will become the head of Tiger Global’s public equity business effective July 1.
Lee Fixel will take over as sole head of Tiger Global’s private equity business, a position he has shared with Shleifer since 2011.
Coleman also says Caleb Watts, who had an important role but a much lower profile, is also leaving the firm next month. He joined Tiger Global in 2005 and became a partner in 2008. “He has been a stellar contributor to our investment team over the past decade across a variety of sectors and geographies and has also helped enrich the firm’s culture,” the letter states. Watts plans to manage his personal money.
Coleman says he will remain closely involved in the portfolio management and investment research of both the public funds and the private funds and will maintain primary responsibility for the non-investment functions of the firm.
He also says the long-short fund’s documents will be amended to reflect Shleifer’s role as a portfolio manager and key man, similar to roles he currently holds in TGLO and TGIO.
Coleman ranked No. 10 on the Rich List with $425 million, his fifth time qualifying for the top-25 earners ranking.
He founded the hedge fund firm as Tiger Technology Management in 2001.
Last year, TGI rose 16.9 percent, making it one of the better-performing hedge funds. However, it is down a little more than 2 percent so far this year.
At the beginning of the year, his public-equity business managed $7 billion in long-short funds; $2.3 billion in TGLO, which reopened on January, and $700 million in the new TGIO.
Tiger Global Management also has more than $10 billion in its private equity and venture capital business.
The firm recently told clients that its long investments in the Internet have compounded at 37 percent gross and 31 percent net since inception.
Before joining Tiger Global, Dewan spent a year at Silver Lake Partners, a technology-oriented private equity firm, and about two years at consulting firm McKinsey & Co. Dewan, who grew up in the Philippines and attended high school in Singapore, earned a BSE in engineering and mathematics from Princeton University in 1998.
