Tiger Global Management’s hedge funds are back in the black ... barely.
The flagship Tiger Global LP fund rose 2.8 percent in May. As a result, it is now up 0.4 percent year-to-date.
The rebound comes amid a fair amount of personnel change over the next few weeks as the fund gears up for the departure of star manager and partner Feroz Dewan, who has been running the public funds — the long-short and long-only funds — on a day-to-day basis.
Meanwhile, its private investment business has been busier than ever.
This week alone the private business made two new investments and has taken at least six new positions in less than three weeks.
In fact, it appears the New York firm founded by Charles “Chase” Coleman III has made at least 18 new investments this quarter alone, according to various published reports. As a result, the June three-month period is shaping up to become perhaps its busiest quarter in recent memory.
It made at least 13 private investments in the first quarter, according to various reports and databases.
The activity occurs as other hedge fund firms — especially those with historical links to Julian Robertson Jr.’s Tiger Management Corp. — have been raising additional money for private investments and overall stepping up their activity in this area.
At the same time, some respected if skeptical observers wonder what will happen when the stock market inevitably corrects and the initial public offering market dries up, making it difficult to cash out from many of these investments. In that kind of environment, managers may also have trouble meeting rising redemptions if liquidity dries up for these private investments, as happened in 2008.
If that happens, Tiger Global would not be affected nearly as much as the other firms with large stakes in private companies since its investments have been made in separate private equity structured funds with long lock ups. However, a small portion of Tiger Global’s hedge funds are also invested in private companies, but not to the extent of other firms.
Right now it’s full speed ahead for Tiger Global’s private equity and venture capital business, headed by Lee Fixel, who is becoming sole head of the more than $10 billion business. He has shared that position with Scott Shleifer, who will become head of Tiger Global’s public equity business on July 1. Shleifer will remain actively involved in searching for attractive private investments.
Tiger Global’s private investments have focused on technology, telecommunications, media, retail and consumer sectors and included Flipkart, SurveyMonkey, Warby Parker, Yandex, Facebook, LinkedIn Corp., Ctrip.com International, MakeMyTrip and OnDeck, among scores of other firms, according to Tiger Global announcements.
Tiger Global has also invested heavily in India over the past few years. That fervor has not abated.
This week the firm participated in a $20 million Series B round of funding for Zopper, an Indian company that calls itself “your local shopping app.” In July 2014, Tiger Global was part of a group that invested $5 million in the company.
Also this week, Tiger Global led a $30 million financing round for Nubank, a Brazilian company that markets a credit card that can be used only on a mobile phone. Other investors include Sequoia Capital.
Last week Tiger Global invested $12 million in Ather Energy, an Indian start-up that is designing a smart electric two-wheeler, or scooter. “We are impressed with Ather’s vision of building smart electric vehicles that has a potential to revolutionize the driving experience,” said Fixel in a press release. “We see great potential in Ather’s product offering and the technology.”
Meanwhile, one of Tiger Global’s holdings that went public earlier this year has been tumbling in price after initially soaring after its IPO.
Shares of Brooklyn-based online craft marketplace Etsy have fallen to about $15.15 after surging as high as $35.74. At the time, the firm enjoyed a huge windfall.
According to the Etsy prospectus, Tiger Global, which did not plan to sell any shares in the IPO, owned more than 7.1 million shares, or 6.4 percent after the offering. The filing also disclosed that on April 1, 2014, Tiger Global bought a little more than 3.3 million shares of Etsy for $10.60 a share, for a total of $35 million. So far, these shares are still above water.
