Tiger Global is having a year.
According to a new report from the Financial Times, 21-year-old clothing that looks poorly but ubiquitous Loss of about $17 billion During this year’s sell-off of technology stocks. The FT notes that this is one of the biggest dollar declines for hedge funds in history.
Shockingly, according to the FT, the hedge fund assets run by the Edmond de Rothschild Group took such a hit that Tiger Global’s hedge fund assets were wiped out in four months, according to the FT. two-thirds of profits Since its release in 2001. (Ouch.)
The question is whether that split will affect the ventures of companies that have expanded rapidly in recent years, like many other startups. In 2020, the company closed its 12th venture fund with a capital commitment of $3.75 billion. After closing its 13th venture fund (title XIV for superstitious reasons) at $6.65 billion earlier last year, it closed its newest fund, the XV Fund, with large sums of money. $12.7 billion Capital commitments in March of this year.
still that The new fund, which is said to contain about $1.5 billion in commitments from Tiger’s employees, took less than six months to raise, the company’s sources said.
On the one hand, it’s not entirely surprising that Tiger Global has already invested a lot of money in the people it cares about. it added 118 Unicorn Companies It made the list of portfolio companies last year, and continued to outperform all other investors in the first quarter of this year, according to Crunchbase News.
That round wasn’t small, at least until earlier this year. Last December, Tiger Global $1.8 billion Series B Invest in nuclear fusion startups Commonwealth fusion system. In November, he led a $600 million Series D round for electric vehicle maker Nuro.
We closed 78 deals in the first quarter of this year. These include Getir’s $768 million Series E round, Istanbul-based on-demand delivery service, $530 million Paris-based online bank Qonto’s Series D round and $273 transaction. Million Series C Round for French Wholesale Market Ankorstore — $7.6 billionCrunchbase News reported last month.
Still, $12.7 billion many It’s not even June.
Naturally, how much money Tiger could raise for the next fundraiser, and by when.
Perhaps the companies we contacted earlier today with questions we haven’t answered already have tender promises. But there’s no worse time to raise another big fund from your backers.
Almost every institutional investor around the world has seen their stock portfolio go bankrupt. And, as many readers know, startups don’t keep their money set aside in huge piggy banks. They ask for committed capital from investors when they need it.
This process allows VCs to start watching each investment as soon as the check is written, but also exposes them to extreme market volatility. When public stocks start to plummet as they are now, college endowments, pension funds, and other institutional investors are reluctant to meet their capital obligations as they have to sell submerged public company stocks.
These same institutions also typically retreat from new fund commitments. The reason is that as open market portfolios shrink, they are overvalued by private market allocations. (Most of them have goals that must be met to be diversified enough.)
If the market doesn’t rebound, current trends will start to affect everyone, but the terrain can be particularly challenging for the team as Tiger’s performance has changed dramatically even compared to four months ago.
There are certainly cases where it is weaker. According to the FT, hedge fund investors who invested in Tiger Global’s 2001 launch made more than 20 times their initial investment despite huge losses. However, that’s only twice the return you could earn by investing in the S&P 500 over the same 21-year period (not counting Tiger’s management fees).
On the other hand, if the exit market does not improve, venture investments from Tiger Global could go sideways along with investments from many other companies.
Tiger Global clearly sees it coming. Working as a unit for both hedge fund and venture betting, the team had already largely abandoned late-stage venture trading by early February. reported in the same month.
Venture capitalist Keith Rabois, whose Founders Fund sometimes competes with hedge funds, said in an interview with Information at the time that some of the setbacks from these massive rounds are likely given the stock price of publicly traded tech companies plummeting. Said it was inevitable. “If you have a high burnout rate and raise money at a high price, you’re going to hit a brick wall very quickly,” he said of the late-stage startup. “No more freebies.”
It’s easy to wonder if Tiger Global’s strategic transition to an early-stage startup is coming too late and there is no quick answer to this. Unlike the hedge fund business, Tiger Global has ample time to judge recent venture investments. (The company has historically enjoyed several big venture successes, including betting on Facebook, Linkedin, Airbnb, and Peloton.)
Meanwhile, the due diligence-proud Tiger Global may be celebrating at least one obvious victory right now. One-click checkout company Bolt says its current largest customer is being sued for “failing to fully deliver the technical capabilities that they claimed to have,” and their former employees tend to exaggerate. Metrics.
like the New York Times wrote today After Tiger management met the company in an article about Bolt, he wasn’t sure that the traders he directed would use Bolt past the trial period, and he thought Bolt’s earnings forecasts were overly optimistic.
Tiger Global went through the deal while hard-hit companies including General Atlantic, WestCap and Untitled Investments (founded by former Tiger Global investors who left the company in 2017) funded Bolt.