Key Takeaways
- • Tiger Global's main hedge fund, which managed $20.5 billion at end of 2021, declined 52% in the first five months of 2022, while its long-only stock fund fell 61.7%—representing one of the largest hedge fund losses of the year.
- • The firm's venture capital business, accounting for roughly two-thirds of Tiger Global's ~$95 billion in assets under management as of October 2021, provides a cushion against hedge fund losses; its latest $12.7 billion fund closed in March with reported double-digit net internal rates of return since inception.
- • Over 90% of value created by Tiger Global's venture funds launched in 2018 and later consists of unrealized gains, creating significant exposure to mark-down risk as tech valuations compress and IPO activity freezes.
- • Tiger Global marked down VC investments by approximately 9% in aggregate during Q1 2022, with further write-downs expected as the June quarter concludes and market conditions for venture-backed companies deteriorate.
- • Management fees were reduced, signaling acknowledgment of performance deterioration in the hedge fund division while the venture capital arm—where most assets reside—remains the key performance wildcard for investor outcomes.
Summary
Tiger Global Management, the New York-based hedge fund and venture capital firm led by Chase Coleman, is navigating one of the most severe performance crises in its history as of June 2022. The firm's flagship hedge fund, which held $20.5 billion in assets at the end of 2021, suffered a 52% loss in the first five months of the year. A separate long-only stock fund performed even worse, declining 61.7% over the same period. These losses rank among the largest in the hedge fund industry for 2022, prompting the firm to reduce management fees as a conciliatory gesture to limited partners.
However, Tiger Global's substantial venture capital business provides meaningful insulation from the full impact of these hedge fund losses. As of October 2021, the firm managed approximately $95 billion across all vehicles, with venture capital representing roughly two-thirds of that total. The firm's most recent venture fund, a $12.7 billion commitment that closed in March 2022, reportedly achieved double-digit net internal rates of return since its inception the prior year. This venture-focused pivot—which transformed Tiger Global from a traditional hedge fund into what became the world's busiest venture capitalist in 2021—has become central to the firm's overall value proposition to investors.
The significant risk lies in the composition of Tiger Global's venture portfolio. According to PitchBook data, more than 90% of the value created by Tiger's venture funds launched in 2018 or later consists of unrealized gains. Tiger Global's two largest and newest funds both have 2021 as their vintage year, meaning their valuations are highly exposed to the current tech downturn. The firm marked down VC investments by approximately 9% in aggregate during the first quarter of 2022. As the June quarter draws to a close, additional write-downs are expected given the sustained selloff in technology stocks and the freeze in initial public offerings that has reshaped startup valuations across the industry.
The ultimate magnitude of Tiger Global's "day of reckoning" depends heavily on how its venture capital arm performs through the remainder of 2022 and beyond. While hedge fund losses are crystallized and severe, venture valuations remain largely theoretical—a dynamic that could work either in the firm's favor if markets stabilize or against it if the tech correction deepens.
However, Tiger Global's substantial venture capital business provides meaningful insulation from the full impact of these hedge fund losses. As of October 2021, the firm managed approximately $95 billion across all vehicles, with venture capital representing roughly two-thirds of that total. The firm's most recent venture fund, a $12.7 billion commitment that closed in March 2022, reportedly achieved double-digit net internal rates of return since its inception the prior year. This venture-focused pivot—which transformed Tiger Global from a traditional hedge fund into what became the world's busiest venture capitalist in 2021—has become central to the firm's overall value proposition to investors.
The significant risk lies in the composition of Tiger Global's venture portfolio. According to PitchBook data, more than 90% of the value created by Tiger's venture funds launched in 2018 or later consists of unrealized gains. Tiger Global's two largest and newest funds both have 2021 as their vintage year, meaning their valuations are highly exposed to the current tech downturn. The firm marked down VC investments by approximately 9% in aggregate during the first quarter of 2022. As the June quarter draws to a close, additional write-downs are expected given the sustained selloff in technology stocks and the freeze in initial public offerings that has reshaped startup valuations across the industry.
The ultimate magnitude of Tiger Global's "day of reckoning" depends heavily on how its venture capital arm performs through the remainder of 2022 and beyond. While hedge fund losses are crystallized and severe, venture valuations remain largely theoretical—a dynamic that could work either in the firm's favor if markets stabilize or against it if the tech correction deepens.
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