What a difference a year makes for the folks at Tiger Global Management, the investment firm founded by Chase Coleman III.
Last year at this time, the Tiger Seed’s long-short hedge fund, Tiger Global Investments, had already fallen more than 23 percent, a huge hole that it never came close to digging out of. It finished the year down 15.3 percent.
However, the story is totally different this year. Tiger Global Investments posted a 4.9 percent gain in February and is now up 10.6 percent for the year, making it one of the best-performing hedge funds so far. As a result, the fund is already halfway back to its high-water mark, and Tiger Global has now posted a profit in six of the past seven months.
During this period, the hedge fund had been aggressively lifting its public equity net exposure, from just 6.1 percent at the end of the second quarter to 25.4 percent by the end of September and 43.4 percent at year-end. During that period it lifted its long exposure from 67 percent to more than 90 percent. Virtually all of this exposure is to what the firm calls the Americas, as opposed to Asia, Europe or the undefined “other.”
Tiger Global is known for running a concentrated portfolio emphasizing technology, internet, media, and telecommunications stocks. At year-end media and internet stocks alone accounted for essentially the entire net exposure in the firm’s long-short funds.
Retail and consumer issues, by contrast, ran 15 percent net short. These stocks accounted for about half of Tiger Global’s negative bets at year-end, making it one of a growing number of long-short funds that are shorting the shrinking, struggling brick-and-mortar retail industry.
We don’t know the specific stocks that comprise the long-short fund’s portfolio.
However, according to the most recent regulatory filings available, at year-end, Tiger Global reported that three stocks alone accounted for more than 50 percent of U.S. long assets firm-wide. They are (in order of position size) The Priceline Group, JD.com, and Amazon.com. In the fourth quarter, Tiger Global lifted its stake in both Priceline and JD.com by 36 percent.
In the first two months of the year, these stocks are up nearly 18 percent, 17 percent and nearly 13 percent, respectively.
Cable and broadband giant Charter Communications — Tiger Global’s fourth-largest long, accounting for more than 8 percent of U.S. long assets, gained more than 12 percent. Fiat Chrysler, its largest new position established in the fourth quarter, surged more than 20 percent. It was the fifth largest overall U.S. long held by the firm.
Google, its second-largest new long in the fourth quarter, rose about 6.6 percent.
Will Tiger Global be able to sustain its early-year gains? Well, as it has painfully learned in the past, the answer is heavily dependent upon whether investors continue to reward the tech and internet stocks the hedge fund traditionally favors.
