Tiger Global slashes bets on tech groups after stock market sell-off

Tiger Global, the hedge fund recognized for making huge bets on expertise firms, slashed its shareholdings and dumped stakes in firms equivalent to Netflix and Rivian because it suffered heavy losses throughout this yr’s inventory market rout.

The full worth of Tiger Global’s public inventory positions fell from $46bn on the finish of final yr to simply over $26bn on the finish of the primary quarter, in response to regulatory filings launched on Monday. The decline in worth represented decrease inventory market valuations in addition to share gross sales.

In a major retreat for the New York-based agency, Tiger Global offered its complete stake in a number of well-known shopper tech firms, together with relationship app Bumble, trip rental firm Airbnb and Didi, the Chinese language ride-hailing group.

It additionally considerably diminished its publicity to buying and selling app Robinhood, promoting virtually 80 per cent of its stake, and Peloton, the beleaguered linked health firm. Tiger Global declined to remark.

Tech shares have been pummelled this yr as buyers grapple with larger inflation and rates of interest whereas changing into cautious of firms that prospered in the course of the coronavirus pandemic however have fallen out of favour as economies have reopened.

The dramatic pullback by Tiger Global is the most recent proof of a bruising begin to the yr for the hedge fund and its founder Chase Coleman, who constructed a popularity as one of many world’s most outstanding development buyers after setting the agency up in 2001.

The disclosures on Monday had been made in routine quarterly filings generally known as 13-Fs. They arrive after the Monetary Instances reported earlier this month that Tiger Global had been hit by losses of about $17bn throughout this yr’s expertise sell-off, one of many greatest greenback declines for a hedge fund in historical past.

Earlier this month, Tiger Global instructed buyers its inventory choosing funds had suffered massive losses, leaving them properly under earlier peaks. Tiger Global’s primary hedge fund fell 15.2 per cent in April, bringing this yr’s losses to 43.7 per cent. One other fund that solely makes “long” inventory investments fell 51.7 per cent between the beginning of the yr and the top of April.

Tiger Global referred to as the outcomes “very disappointing” in a letter to buyers, including that “markets have not been co-operative given the macroeconomic backdrop”.

The hedge fund has gained notoriety for an aggressive type of investing in non-public start-ups that has startled some rival enterprise capitalists. It instructed buyers in March it had raised $12.7bn for its latest enterprise capital fund, the most important of its sort.

Not like a few of Tiger Global’s earlier funds, the brand new car has centered on making investments in comparatively younger start-ups. Tiger Global instructed buyers greater than half of the fund’s investments had been in Sequence A or Sequence B offers, sometimes the primary or second main financings for personal tech firms.

A few of Tiger Global’s first-quarter share gross sales had been of firms it backed as non-public start-ups. For example, the agency offered greater than 70 per cent of its stake within the cryptocurrency alternate Coinbase, which totalled $724mn on the finish of final yr.

It additionally offered 95 per cent of its shares within the software program firm UiPath, a place that had been valued at $354mn.

Third Level, the hedge fund led by Daniel Loeb, additionally shed a few of its largest tech investments.

The New York-based fund offered its complete stake in Google’s guardian firm Alphabet and greater than 90 per cent of its place in Amazon in the course of the first quarter, in response to filings. It additionally offered a greater than $600mn stake within the fintech firm Upstart, which it had backed as a personal start-up.

In a letter to buyers this month, Loeb stated the fund had “adopted a significantly more defensive posture” starting within the first quarter due to “concerns about valuations in the current interest rate environment, geopolitical uncertainty, and emerging weakness in important global economies”.

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