Did Spotify become Tiger Global Management’s largest U.S. long position at the end of the second quarter?
Yes and no.
The investment firm’s latest 13F filing with the Securities and Exchange Commission clearly states that it held 12.8 million shares in the streaming music company valued at more than $2.15 billion. That’s slightly higher than the value of its stake in Amazon.com.
So, observers who obsessively track the quarterly U.S. equity holdings of hedge funds quickly concluded that Spotify is now the No. 1 holding of Tiger Global’s long-short and long-only hedge funds.
This is not the case, however.
Yes, the firm founded by Chase Coleman, who was seeded by Tiger Management’s Julian Robertson Jr., does own 12.8 million shares of Spotify. That said, they are still mostly held by Tiger Global’s venture capital funds, which bought the shares when the company was still private.
Here’s the scoop.
Back in April the Swedish company went public in what is called a direct listing. In other words, it did not sell shares like in a traditional initial public offering (IPO). So, all of its private shares immediately became public shares.
At the time Spotify’s U.S. regulatory filing showed that Tiger Global owned more than 12.8 million shares, or 7.2 percent of Spotify’s total ordinary shares. Most of the shares were owned by Tiger Global Private Investment Partners IX, one of its venture capital funds.
Tiger Global manages a total of $22 billion in capital. This includes its hedge funds, its long-only fund, and its venture capital funds. Of this sum, Tiger Global had about $8.6 billion in its long-short funds, according to its June exposure report.
Generally, most of the venture capital funds’ assets are invested in private companies. About 10.6 percent of the long-short fund’s assets were invested in private companies as of the end of June.
In its first-quarter letter to clients of its hedge funds, Tiger Global said its hedge funds had purchased 0.5 percent of Spotify for roughly $107 per share.
The 12.8 million shares disclosed in the 13F are the same 12.8 million shares that the private funds reportedly owned when Spotify went public. Tiger Global had to include all of those shares in its 13F for reporting reasons, even though nothing really changed. The venture capital funds didn’t sell any shares, and the hedge funds and long-only funds didn’t suddenly buy millions of shares after Spotify went public.
As it turns out, Tiger Global did not make any major changes to its top-ten positions in its long-short and long-only funds.
