Tiger Global losses mount after whipsawing tech valuations

Losses at Tiger Global Management continued to mount in October after the New York-based hedge fund was buffeted by the whipsawing value of technology stocks in the US and a sell-off in China.

The firm’s flagship hedge fund lost 5.4 per cent in October, taking losses so far this year to a new low of 54.7 per cent, according to a person with knowledge of the figures.

A “crossover” fund that mixes publicly traded technology holdings without any hedges and Tiger’s private equity investments fell 4 per cent in October, putting year-to-date losses at 44 per cent, another fresh low, according to a document seen by the Financial Times.

At the mid-year point, Tiger’s flagship fund had fallen about 50 per cent, while the crossover fund had fallen by nearly 36 per cent, according to documents.

The technology-heavy Nasdaq Composite gained 4 per cent last month. Tiger declined to comment.

The new losses underscore continued pressure on Tiger’s sprawling portfolio of public and privately held technology companies as founder Chase Coleman and top executive Scott Shleifer work to better manage the firm’s risks and adapt to volatile markets.

Tiger has halted new investment in China as it awaits further clarity on how President Xi Jinping will manage the world’s second-largest economy, according to a person familiar with the situation.

Tiger had been reducing his exposure to the country ahead of the Chinese Communist party meeting in October, in which Xi secured a new five-year term and consolidated power, the person added.

The Wall Street Journal reported earlier this month on the halt in new Chinese equity investments.

Tiger Global managed about $17bn of hedge fund assets at the mid-year point in addition to over $40bn of private equity investments in groups such as TikTok parent company ByteDance, financial technology group Stripe and software provider Databricks.

The hedge fund’s public holdings have plunged in value this year amid a sharp reset in public technology stock valuations. The firm’s private equity holdings have also been marked down every month this year.

In its mid-year letter to investors, Tiger blamed its losses on the negative impact of high inflation and rising interest rates on technology stocks. It also said hedges on its public stock portfolio did not fully protect the fund against rising market volatility.

China, a source of some of Tiger’s biggest investment coups such as its investments in JD.com, has now become one of its foremost problems.

Schleifer, head of the Tiger’s private equity business, helped lead an investment in the ecommerce company when it was a small private start-up, leading to one of the group’s most profitable investments.

However, Tiger has been stung by a sharp sell off in Chinese stocks. JD.com, Tiger’s largest public holding as of mid-year, has fallen 35 per cent this year.

The Financial Times previously reported that the New York-based hedge fund had boosted exposure to some Chinese investments in its portfolio this year. It added jobs website Kanzhun and electric carmaker Li Auto to the 10 biggest holdings in its public equities portfolio at mid-year.

Stocks in both companies slide sharply in October before rebounding this month.