Tiger Global hit by $17 billion losses in tech rout

Tiger Global suffered losses of around $17 billion in its tech stock selloff this year, marking one of the biggest dollar declines for a hedge fund in history.

The streak of poor performance means the company – one of the world’s largest hedge funds and a big investor in high-growth speculative companies whose shares have fallen since their pandemic peaks – has erased both third of its earnings since its launch in 2001, according to calculations by LCH Investments.

“The scale of the loss is mind-boggling, especially for a fund with ‘hedging’ in its name,” said Andrew Beer, managing member of investment firm Dynamic Beta. “It shows how even the most talented and hip tech investors haven’t seen the train rolling down the tracks.”

The losses were estimated by LCH, a fund of hedge funds managed by the Edmond de Rothschild Group, which is an authority on the dollar gains and losses made by hedge funds for their clients and compiles an annual list of top managers. of global funds.

Tiger declined to comment. Investors who put money into the fund at launch have made more than 20 times their initial investment, a person familiar with the fund said.

Still, the losses eclipse some of the biggest declines in the $4 billion hedge fund industry in recent years. These include the $12.1 billion lost by investment giant Bridgewater in 2020 during the market tumult caused by the coronavirus pandemic, or the loss of approximately $7 billion by Melvin Capital during from the GameStop retail frenzy early last year.

New York-based Tiger, which recently managed about $90 billion in assets, was founded 21 years ago by Chase Coleman, a so-called “Tiger cub” who worked for the hedge fund Tiger Management of the legendary investor Julian Robertson.

Coleman’s fund has in the past made huge gains for investors, helped by hard-hitting bets on tech stocks. At the start of 2021, he was ranked by LCH as the 14th best performing hedge fund manager of all time, having made $10.4 billion in earnings, a 48% return, for investors the previous year. and a total of $26.5 billion since. launch.

But his fund was hit hard in the recent speculative asset sell-off, as the Federal Reserve’s decision to raise interest rates to curb inflation dampened the appeal of high-growth companies whose records Investments are often based on the promise of profits far into the future.

The fund has lost 43.7% in the first four months of this year, the Financial Times reported earlier this month, more than double the 21% decline recorded by the Nasdaq Composite equity indicator. of Wall Street.

Tiger’s dollar losses, which relate to its hedge fund rather than its private equity business, do not include the impact of a tech sale late last year that left Tiger down 7 % for the whole of 2021.

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