Few hedge fund firms more aggressively chase tech investments than Tiger Global. Here’s why the firm likes Internet, software and tech — and China and India
Tiger Global has stakes in many Internet companies, including Beijing-based JD.com (Photo credit: Tomohiro Ohsumi/Bloomberg)
No hedge fund firm is as equally committed to public and private technology investments as Charles (“Chase”) Coleman III’s Tiger Global Management.
At the beginning of the year, the New York firm’s hedge funds and long-only funds, which comprise its public funds, managed a total of $10 billion, up from $6 billion or so two years earlier. Tiger Global also has a separate venture capital business, which invests in private companies. In midyear, seven active funds, known as private investment partners, or PIPs, held 128 investments valued at $12.9 billion. Since 2003, nine private funds have invested $9.2 billion in 201 companies in 30 countries.
The PIP portfolios invest in nonpublic, pre-initial-public-offering companies but have much longer lockups than the public funds.
Tiger Global is representative of an increasing trend among some hedge fund firms to attack tech investing on both the public and private side. In this, the last article in a five-part series looking at hedge funds and technology investing, we examine one of the firms that exemplify an aggressive focus on technology.
Also from this series:
Tech Stocks on the Edge of a Nervous Breakdown
Hedge Funds and Tech Stocks: A Tighter Focus, a Wider Search
Hedge Funds and Tech Stocks: Dump the Old, Embrace the New
Hedge Funds and Tech Stocks: The Allure of Private Investments
In terms of personnel, Tiger Global has seen some changes in 2015. After the June departure of Feroz Dewan, who was running Tiger Global’s hedge funds on a day-to-day basis, Scott Shleifer was named head of Tiger Global’s public equity business. Shleifer has been with the firm since 2002 and, since 2011, had headed up the private business with Lee Fixel, who now runs it by himself.
Despite Dewan’s departure, Tiger Global’s strategy for its public funds remains intact and quite straightforward: to buy well-positioned companies at low multiples of future free cash flow and short poorly positioned companies at high multiples of future free cash flow.
In its second-quarter letter to investors, the firm said it is trying to more effectively focus and “simplify” its business by emphasizing areas it believes its research “can yield a meaningful competitive advantage.” The letter went on to suggest that “several of the most prominent themes” in its long portfolio, such as Internet, software and technology companies, will likely increase “meaningfully in importance over time.”
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