Tiger Global, the hedge fund known for making big bets on technology companies, slashed its shareholdings and dumped stakes in companies such as Netflix and Rivian as it suffered heavy losses during this year’s stock market rout.
The total value of Tiger Global’s public stock positions fell from $46bn at the end of last year to just over $26bn at the end of the first quarter, according to regulatory filings released on Monday. The decline in value represented lower stock market valuations as well as share sales.
In a significant retreat for the New York-based firm, Tiger Global sold its entire stake in several well-known consumer tech companies, including dating app Bumble, vacation rental company Airbnb and Didi, the Chinese ride-hailing group.
It also significantly reduced its exposure to trading app Robinhood, selling almost 80 per cent of its stake, and Peloton, the beleaguered connected fitness company. Tiger Global declined to comment.
Tech stocks have been pummelled this year as investors grapple with higher inflation and interest rates while becoming wary of companies that prospered during the coronavirus pandemic but have fallen out of favour as economies have reopened.
The dramatic pullback by Tiger Global is the latest evidence of a bruising start to the year for the hedge fund and its founder Chase Coleman, who built a reputation as one of the world’s most prominent growth investors after setting the firm up in 2001.
The disclosures on Monday were made in routine quarterly filings known as 13-Fs. They come after the Financial Times reported earlier this month that Tiger Global had been hit by losses of about $17bn during this year’s technology sell-off, one of the biggest dollar declines for a hedge fund in history.
Earlier this month, Tiger Global told investors its stock picking funds had suffered large losses, leaving them well below previous peaks. Tiger Global’s main hedge fund fell 15.2 per cent in April, bringing this year’s losses to 43.7 per cent. Another fund that only makes “long” stock investments fell 51.7 per cent between the start of the year and the end of April.
Tiger Global called the results “very disappointing” in a letter to investors, adding that “markets have not been co-operative given the macroeconomic backdrop”.
The hedge fund has gained notoriety for an aggressive style of investing in private start-ups that has startled some rival venture capitalists. It told investors in March it had raised $12.7bn for its newest venture capital fund, the largest of its kind.
Unlike some of Tiger Global’s previous funds, the new vehicle has focused on making investments in relatively young start-ups. Tiger Global told investors more than half of the fund’s investments were in Series A or Series B deals, typically the first or second major financings for private tech companies.
Some of Tiger Global’s first-quarter share sales were of companies it backed as private start-ups. For instance, the firm sold more than 70 per cent of its stake in the cryptocurrency exchange Coinbase, which totalled $724mn at the end of last year.
It also sold 95 per cent of its shares in the software company UiPath, a position that had been valued at $354mn.
Third Point, the hedge fund led by Daniel Loeb, also shed some of its largest tech investments.
The New York-based fund sold its entire stake in Google’s parent company Alphabet and more than 90 per cent of its position in Amazon during the first quarter, according to filings. It also sold a more than $600mn stake in the fintech company Upstart, which it had backed as a private start-up.
In a letter to investors this month, Loeb said the fund had “adopted a significantly more defensive posture” beginning in the first quarter because of “concerns about valuations in the current interest rate environment, geopolitical uncertainty, and emerging weakness in important global economies”.