Tiger Global, based in New York, has suffered losses of about $17 billion during this year’s technology sector selloff, marking one of the largest dollar falls for a hedge fund in history, according to the Financial Times on Tuesday.
According to calculations by LCH Investments, the firm, one of the world’s largest hedge funds, has lost around two-thirds of its gains in four months.
According to LCH Investments, the firm — one of the world’s largest hedge funds and a major investor in high-growth, speculative companies whose shares have fallen since their epidemic peaks — has reversed around two-thirds of its gains since its inception in 2001 in four months.
“The magnitude of the loss is breathtaking,” said Andrew Beer, managing member at investing firm Dynamic Beta. This demonstrates how even the most talented and well-connected tech investors missed the train coming down the tracks.
The losses were assessed by LCH, an Edmond de Rothschild Group fund of hedge funds that is an authority on dollar profits and losses generated by hedge funds for their clients and prepares an annual list of the world’s top money managers.
Tiger did not respond. According to a person acquainted with the fund, investors who placed money into the fund at the start have made more than 20 times their initial investment.
Nonetheless, the losses dwarf some of the largest dips in the $4 trillion hedge fund market in recent years. These include Bridgewater’s $12.1 billion loss in 2020 during the market turmoil induced by the coronavirus outbreak, and Melvin Capital’s $7 billion loss during the GameStop retail trading frenzy at the start of the year.
Tiger, situated in New York, was formed 21 years back by Chase Coleman, a so-called “Tiger cub” who works at famed investor Julian Robertson’s hedge fund Tiger Management.
Coleman’s fund has historically outperformed the market, thanks to aggressive investments on technology stocks. By the beginning of 2021, he was listed as the 14th best-performing hedge fund manager of all time by LCH, having made $10.4 billion in gains, or a 48% return, for investors the previous year and a total of $26.5 billion since debut.
However, his fund has taken a beating during the recent sell-off in speculative assets, as the Federal Reserve’s drive to raise interest rates to combat inflation has dampened the appeal of high-growth companies, whose investment propositions are frequently based on the promise of future revenues.
According to the Financial Times, the fund lost 43.7 percent in the first four months of this year, more than doubling the 21 percent loss produced by Wall Street’s tech-heavy Nasdaq Composite share index.
Tiger’s dollar losses, which are for its hedge fund rather than its private equity firm, do not reflect the impact of a late-year tech sell-off, which left Tiger down 7% for the entire year of 2021.
