Chase Coleman, founder of Tiger Global Management LLC (Photo Credit: Amanda L. Gordon/Bloomberg). |
Tiger Global Management in April extended its turnaround from last year’s disaster.
Most critically, the Tiger Seed’s long-short funds seem to be back to breakeven after posting a sharp loss in 2016. The investment firm headed by Chase Coleman posted a 3.4 percent gain last month in its hedge funds, boosting their return for the year to date to 17.4 percent.
This makes the long-short funds among the better performing large hedge funds this year.
The sharp turnaround is also a big relief for the firm’s hedge fund investors investors, who suffered a 15.3 percent loss in 2016 after seeing the fund drop about 23 percent in the first two months of the year alone.
Tiger Global is one of a minority of firms that charges a 10 percent performance fee “until certain loss recovery thresholds are met,” according to its ADV filing. It resumes the 20 percent incentive fee when it moves back above that threshold.
Tiger Global has been helped this year — and late last year — by the kinds of stocks that caused the firm pain early last year. Many of these stocks have been among the market leaders in 2017. We won’t know for another week or so how Tiger Global’s U.S. stock portfolio was positioned at the end of the first quarter and whether it made significant changes since year-end.
We do know that in general, Tiger Global likes to run a highly concentrated portfolio of technology, internet, media, and other stocks that are deemed to be business and economy disrupters.
As we’ve pointed out, Tiger Global raised its public equity net exposure from 6.1 percent at the end of the second quarter of 2016 to 43.4 percent at year-end. During that period it lifted its long exposure from 67 percent to more than 90 percent. Its first-quarter exposure report is still not available.
At year-end three stocks alone accounted for more than 50 percent of Tiger Global’s U.S. long assets firmwide, which includes its long-only funds. They were (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 April the Priceline Group rose nearly 4 percent after climbing 21 percent in the first quarter. JD.com rose about 1.7 percent last month after rising 22 percent in the first quarter. Amazon.com rose about 4.4 percent in April and is up more than 21 percent for the year to date.
Cable and broadband giant Charter Communications, Tiger Global’s fourth-largest long position at year-end, is much smaller than the three largest positions. Its stock rose about 5.5 percent in April after climbing 21 percent in the first quarter.
And although we don’t know anything about Tiger Global’s short book, it is possible that it made money on the declining retail sector. At year-end Tiger Global had a 15.3 percent net exposure to what it calls the retail and consumer sector.
Otherwise, it has much smaller, net negative bets on technology and health care.
