See below for excerpts from a Financial Times 5/10/22 article about Tiger Global losses below. PTON, ZM, AFRM and other pandemic favorites / "tech" stocks currently getting hammered amid Ukraine invasion, higher inflation, supply chain woes, post-pandemic return-to-normalcy, and rising interest rates / discount rates as Fed takes action, driving significant losses at some of the Tiger cubs and other hedge funds that the forum normally puts on a pedestal. Surprised there is so little chatter about this.
Can anyone with inside knowledge comment on what they're seeing and hearing from colleagues / friends around the buy-side? How are firms like Whale Rock coping with these new developments? Are any firms on the verge of collapse or planning on unwinding? I can't imagine LPs will be okay with these funds collecting performance fees with losses this steep, which should absolutely be impacting people's careers / bonuses.
FT ARTICLE (excerpts only; pasting link for FT subscribers who have access)
https://www.ft.com/content/caa49a44-18a3-4e51-9dfb-aad61767fe25
Tiger Global has been hit by losses of about $17bn during this year's technology stock sell-off, marking one of the biggest dollar declines for a hedge fund in history. The run of poor performance means the firm... has in four months erased about two-thirds of its gains since its launch in 2001... "The magnitude of the loss is breathtaking, especially for a fund with 'hedge' in its name," said Andrew Beer, managing member at investment firm Dynamic Beta. "This shows how even the most talented and plugged-in tech investors failed to see the train coming down the tracks."...
...Coleman's fund has in the past made huge gains for investors, helped by punchy bets on tech stocks. By the start of 2021 he was ranked... as the 14th best-performing hedge fund manager of all time, having made $10.4bn of gains, or a return of 48 per cent, for investors the previous year and a total of $26.5bn since launch. But his fund has been badly knocked during the recent sell-off in speculative assets... The fund lost 43.7 per cent in the first four months of this year... Tiger's dollar losses, which are for its hedge fund rather than its private equity business, do not include the impact of a tech sell-off late last year, which left Tiger down 7 per cent for the whole of 2021.
Comments (62)
From the most recent 13F D1 must be down 40-50%
Brutal... saw that the Sondheim had some words of criticism for AMZN on Twitter. Crazy that these sophisticated guys don't seem to understand that buying these names was both a bet on 1) strong intrinsics and fundamentals but also 2) interest rates remaining low. I would've been trimming down aggressively as soon as inflation started to jump. Would've been closing out positions completely after the Ukraine sanctions hit.
Hindsight is 20/20
That's right. I needed hindsight to detect that there was a bubble in high-growth/tech stocks driven by a decade-plus of low inflation and low interest rates... if only these multi-billion dollar hedge funds had hindsight. How else would they have been able to see it?
Even as literally just an intern, I could tell that valuations made no sense. If these sophisticated hedge fund investors couldn't see that, they either couldn't use common sense, or more likely, just didn't give a shit. While times were going good, they were still collecting fat pay checks.
honestly from what i've seen on this site, sundheim is the most simped tiger cub manager.
by "simped" you mean followed like a cult leader? Probably because unlike Chase, Dan came from a public high school, got into Wharton, THEN built his career and actually had visible passion for the markets even at Wharton. Being on VIC as a college kid especially back then is admirable.
Rumor is Chase Coleman III is an airheaded lacrosse kid that grew up with a silver spoon shoved up his ass and got his daddy to suck julian robertson off into giving him most of the money after julian got bored (but we all know this is the truth)
funny, i heard the same rumor
Yep. Coleman was shit, good at fundraising but that's his core competency.
Not a bad skill to have during a 13 year bull market when your main strategy is to go balls deep tech and short industrials and energy. But it works until it doesn't.
Julian Robertson is still the Godfather and OG. For real investing chops I would think Lone Pine, Coatue, and Viking are better for learning how to pick stocks.
If he can delegate and hire well his ability to sell is enough
Lone Pine and Coatue also mostly just load up on tech. Viking is the most balanced of the Tiger Cubs.
I know people who worked at all 3. Imo lone pine's process is a joke. Coatue is terrible environment but actually trained some killers who ended up doing super well elsewhere. Viking used to be great but lost a bunch of good PMs and new PMs are jokes.
delete
FYI as a data point. I work in distressed and have never once had a conversation with a HH about public equities, etc., and so far have been hit up twice this week for crossover tech / tiger cub spots.
Interesting, thank you. Given their losses, I can only take that to mean they are seeing some attrition on the back of low/non-existent bonuses moving forward. That being said, the fact that they are actively recruiting and also running such a wide process implies they aren't looking to unwind, but are desperate to backfill some of the open seats. Sounds like a nightmare.
Which HH?
As a follow up, I'm seeing rumors on another thread that Whale Rock will either unwind or turn into a family office...
will be interesting to see how chase and scott weather this / whether they'll bounce back
Hard to read but reliable. Thru end of April so doesn't capture recent pain.
[Fund April YTD
12 West Capital -20 -50
Alkeon -10 -27
Armistice 2 2
Averill 7 18
Avidity -0.1 -8
Avoro -10 -17
Balyasny 6.75
Candlestick 1.1 -9
CatRock -11 -41
Cinctive Flat
Coatue -5.75 -15.25
Crescat Long/Short 1.1 19.4
Dellora -7 -22
EcoR1 -8 -18
Eversept -1.5 3
Greenlight 10.6 15.4
HoneyComb -4 -21
Jericho -4.2 -11.4
Lone Pine -5 -30
Melvin Capital -3.3 -23.3
Millenium 2 5.7
Onsight -2.3 -4.8
Paradigm 1.5 -4
Perceptive -11 -27
Pershing Square -8.1 -9.6
PuraVida -10 -17
RTW -13 -28
Samlyn -2.1 -8.7
Schonfeld Fundamental Eqty 4.5
Sculptor/Och Ziff -3.09 -5.86
Tiger Eye -5.5 -13
Tiger Global HF -15 -44
Tiger Global LO -25 -52
Viking -1.2 -9 ]
Thanks. Never heard of Crescat. Anyone have Intel on that shop?
Lol they've been around, this description is completely based off my vibes from loosely following them:
Seems like 2 guys with a terminal, they do macro. Some strongly opinionated stuff, usually wrong/hyperbole. But directionally accurate I think.
Can't really give them much/any shit because their returns have been so good. But a lot of macro sky is falling stuff
search up Tavi Costa, lotta stuff on the internet from him.
any number on Bridgewater?
Through April press is saying +26% net
anyone have hound performance?
This is pretty good. Any info on multi strat/event/credit guys? Elliot, DK, Baupost, silver point, HG, diameter etc
Averill up 18 YTD. wow, wonder how Suvretta is doing
Candlestick down 9, and Honeycomb down 21 YTD are both way more than I expected
.
now is Greenlight's time to shine.
So many ppl here shitting on Tiger saying how could they not have known valuations were stretched at all time highs. Clearly none of these ppl actually worked professionally at a HF where you have to produce PnL every year. You think they didn't think about interest rate risk or being over levered to Nasdaq? Of course they did. But what did you want them to do? Buy a bunch of shitcos and be like Greenlight? I agree that risk mgmt is extremely reckless here but the point about knowing valuations were stretched is just dumb to me. From a guy that works at a pod
Tiger's YTD losses of $17B represent roughly 52%, so let's assume the assets were ~$33B at 12/31/21. 1.5% management fees on $33B would represent ~$500M of mgmt. fees. $500M... even after you take overhead out, it's a staggering amount of money for such a small number of investment professionals. (check my math lol)
I understand your point about not working at a hedge fund and thereby not understanding the nitty-gritty and all the intricacies of the challenges that a professional would face. Fair point. But - as an outsider looking in - what I struggle to comprehend is how a fund could be paid ~$500M of mgmt. fees just to lose $17B dollars... These guys are being paid way too much money to make mistakes at this scale, and I don't think it makes sense to create any kind of excuses for them.
Furthermore, looking at sonibubu's performance list above, most of the managers are actually outperforming the NASDAQ YTD (which was down 22% YTD on 4/29), including Viking and Coatue. Viking also happens to be outperforming the S&P 500 YTD (was down ~14% YTD on 4/29). So this doesn't really appear to be an industry issue as much as it is a Tiger issue. Just look at how their underperformance stands out.
I don't think it's a dumb point (been in the business for 15+ years) but I do think it depends on how the fund sells itself to clients. At the end of the day, it is very hard to be an outsider when each fund structures their targets differently, and agrees with their investors on what they should expect over time.
That being said, I cannot imagine that they sold themselves this way (although it also wasn't like they were selling themself as market neutral). Losses of this magnitude aren't acceptable for basically all investors, and something with their process didn't work properly. It's not saying that they should have known valuations were stretched, people can say that for years and be wrong, but to not (at least it appears this way) change anything as the world was going from COVID, money printing, etc, to inflation, fed tightening, etc seems off and not what I would expect from sophisticated investors.
But at the end of the day, it is for the fund and investors to figure out what is acceptable.
Can't hedge funds make drastic moves?
Ackman dumped his entire NFLX position.
Why is it such a crime to hold cash? Baupost does it. I guess it flies directly in the face of how Tiger made their gains... sort of a "live by the sword die by the sword" situation. How do you explain to greedy investors who've road off growth for a decade that it's time to sell everything and wait. They'd have to do it in a month too else everyone would read that 13F and they'd probably precipitate the start of the crash in that universe.
Why hold cash when you can hedge? Leverage can be tough, but managing to keep net lower than gross, and gross lower than 100%, seems fine
to those that work for crossovers...how much of tiger (and other funds)'s hodling has to do with some of the names having been venture investments (e.g. pton)? even if sequoia ran their numbers and thought that doordash (and others) would drop precipitously, could they really sell with their motto being to partner with their founders beyond IPO and their relationship with tony xu? same with altimeter and snowflake, etc. I understand that these names are prob a minority of their public book, but just a thought that for crossovers, the interests of the public vehicle and private vehicle / entire fund manager aren't aligned.
This is an interesting point, along with the above comment. It's unclear how these crossovers were pitching themselves to LP's. If LP's consider them hedge fund vehicles then obviously their performance is terrible. But if LP's place them in the VC bucket then these drawdowns are less damning. Private VC funds will probably have even worse performance this year but it will take a while to manifest.
It is weird to me, looking at Tiger's 13f filing how concentrated he was, almost wholly tech, a shitload of kathy wood stuff.
In the envoriment this year, the insanely high PE stuff, the highly speculative growth stuff is basically the same trade. All that stuff basically moves in sync most days.
So it's basically one big bet,this seems crazy to me from a risk management standpoint.
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