Tiger Global Management became more bullish in the third quarter.
The hedge fund firm headed by Chase Coleman lifted its net equity exposure in its long-short equity funds’ public portfolio to more than 25 percent from only around 6 percent the previous quarter, according to its September exposure report. The move came as the portfolio posted a total gain of more than 8 percent in the August-September period, paring its loss for the year to 15.3 percent.
Even so, Tiger Global’s net exposure is still significantly below where it was a year ago.
We had reported earlier that in the first quarter, the firm cut the portfolio’s gross exposure to 134.2 percent, from about 199 percent at year-end, and slashed net exposure to 5 percent from 40 percent at year-end.
At the end of June, gross exposure was trimmed further, to 127.5 percent, when the net stood at around 6 percent after averaging around 12 percent for the second quarter.
As we had reported at the time, the firm’s hedge funds —which it collectively calls Tiger Global Investments — lost 22.1 percent in the first quarter, with most of the losses coming in the first two months.
It has been battling to get back to break-even ever since, paring one-third of the loss. But with just three months to go, it is in danger of suffering its worst year since 2008.
Of course, its investors remember that last year, when it finished up 6.9 percent for the year, Tiger Global Investments entered the fourth quarter down 5.1 percent.
In any case, a 25 percent net exposure is still low for Tiger Global. For example, at the end of the third quarter of 2015, it was closer to 52 percent, which is more or less in line with the typical long-short fund.
Tiger Global got to its current exposure level by lifting its long bets and reducing its short bets, maintaining a total exposure of about 131 percent.
Little surprise, the hedge fund has placed its biggest bets on media and Internet stocks, its specialty. The sector’s 42.4 percent net exposure is mostly all long bets, compared with the previous quarter, when it was nearly 34 percent net long the sector, with no hedges.
At the same time, Tiger Global reduced its big bet against retail and consumer stocks by four percentage points, to a net short position of about 25 percent.
In the third quarter, Tiger Global also fully removed a negative bet on stock indices.
Otherwise, the portfolio is more or less positioned similarly to how it was in the second quarter.
Among specific stocks in the third quarter, Tiger Global lifted its stakes in its three largest holdings — e-commerce giant Amazon.com, cable and broadband leader Charter Communications and online travel network The Priceline Group.
It also liquidated its entire stake of nearly 18 million shares in streaming video mainstay Netflix.
