Key Takeaways
- • Tiger Global Management, Chase Coleman's $50 billion hedge fund, sustained material losses from its FTX investment following Binance's emergency acquisition announcement on November 8, 2022, as the crypto exchange faced a liquidity crisis.
- • Tiger participated in FTX's Series C funding round (January 2022) at a $32 billion valuation and Series B round at $25 billion; pre-rescue valuations had collapsed to $10–$20 billion, representing a severe markdown of invested capital.
- • The fund's flagship hedge fund reported a 54.7% year-to-date loss as of November 7, 2022, driven by deteriorating bets in technology and Chinese equities, compounded by the FTX position loss.
- • Binance announced a non-binding letter of intent to acquire FTX's non-U.S. businesses subject to due diligence, with no deal terms disclosed; the sudden rescue requirement signals distress for recent-round investors including Tiger Global.
- • Tiger Global declined to disclose the size of its FTX investment or which specific fund held the position amid broader portfolio underperformance across venture and public equity allocations.
Summary
Tiger Global Management faced additional portfolio losses on November 8, 2022, following Binance CEO Changpeng Zhao's announcement that his exchange would acquire FTX's non-U.S. operations to address the crypto platform's "significant liquidity crunch." The acquisition, structured as a non-binding letter of intent pending due diligence, underscored FTX's financial distress and created immediate valuation pressure for Tiger's holdings in Sam Bankman-Fried's exchange.
Chase Coleman's hedge fund had been among FTX's most prominent institutional backers. Tiger participated in FTX's Series C funding round in January 2022, which valued the company at $32 billion, and in an earlier Series B round valued at $25 billion (notable for FTX raising exactly $420.69 million, mimicking Elon Musk's playbook). Prior to Binance's rescue announcement, FTX was reportedly seeking outside capital at a sharply reduced valuation of $10–$20 billion, according to the Block—a material haircut from Tiger's entry valuations.
The FTX position loss compounds Tiger Global's broader 2022 underperformance. The fund's flagship hedge fund reported a 54.7% year-to-date decline as of November 7, 2022, driven by deteriorating positions in technology stocks and Chinese equities. A separate Tiger fund holding public equities and private equity investments was down 44% for the year. Tiger Global declined to specify which fund contained the FTX investment or disclose the dollar amount at risk.
The emergency nature of Binance's acquisition—structured as a bailout rather than a strategic transaction at full valuation—typically signals substantial losses for recent-round investors. No deal terms were announced publicly, and both Binance and FTX declined to provide additional comment to Forbes at the time of reporting, leaving the ultimate impact on Tiger's returns unclear but almost certainly material given the valuation compression.
Chase Coleman's hedge fund had been among FTX's most prominent institutional backers. Tiger participated in FTX's Series C funding round in January 2022, which valued the company at $32 billion, and in an earlier Series B round valued at $25 billion (notable for FTX raising exactly $420.69 million, mimicking Elon Musk's playbook). Prior to Binance's rescue announcement, FTX was reportedly seeking outside capital at a sharply reduced valuation of $10–$20 billion, according to the Block—a material haircut from Tiger's entry valuations.
The FTX position loss compounds Tiger Global's broader 2022 underperformance. The fund's flagship hedge fund reported a 54.7% year-to-date decline as of November 7, 2022, driven by deteriorating positions in technology stocks and Chinese equities. A separate Tiger fund holding public equities and private equity investments was down 44% for the year. Tiger Global declined to specify which fund contained the FTX investment or disclose the dollar amount at risk.
The emergency nature of Binance's acquisition—structured as a bailout rather than a strategic transaction at full valuation—typically signals substantial losses for recent-round investors. No deal terms were announced publicly, and both Binance and FTX declined to provide additional comment to Forbes at the time of reporting, leaving the ultimate impact on Tiger's returns unclear but almost certainly material given the valuation compression.
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