Tiger Global's Scott Schliefer Out

This is making the rounds in hedge fund and tech circles. Sent to me earlier from a friend.

Questions Tiger Global LPs Are Asking:

1. Tiger Global Private Investment Partners (PIP) 16 just closed on $2 billion of capital in June. How can Chase Coleman announce that Scott Shleifer will be “stepping back” only a few months later given Shleifer was the main driver of PIP fundraising and approved all investments in the PIP funds historically? The investigation has shown that Shleifer did not co-manage the PIP funds with Coleman but rather was the main decision-maker in practice across the funds and personally evaluated and approved every investment made in the funds. Coleman was only consulted with and signed off on less than 10% of the investments in the PIP funds according to our investigation. Tiger Global’s private business was managed primarily by Shleifer. He ran the operation since starting the PIP funds almost two decades ago. He had hired Lee Fixel and Fixel reported to him when he was at Tiger Global. Shleifer himself has affirmed this dynamic to the various parties we spoke with.
2. In communication with LPs about Shleifer’s transition, why was Coleman not candid about the drivers of the upcoming breakup? Our investigation yielded complaints that treating your LP base like they are naïve and will believe whatever you tell them is not helpful in fostering trust, particularly given the investment firm’s woes. The investigation has shown that Tiger Global has operated as a firm with multiple offices around the world for almost two decades now. In fact, several of the firm’s most profitable investments were sourced and led out of the firm’s Hong Kong office, which still exists today with a number of reputable investment professionals. Yet Shleifer, who still has two homes in New York State, is not allowed to have his main residence in Florida, a less than 3 hour commute from New York City? But more junior investment team members are allowed to work on the other side of the world? Based on our investigation, the rationale Coleman provided in the LP communications is not remotely credible
3. A “memo” describing various allegations about Tiger Global went viral in late August. The “memo” was largely focused on Shleifer. After successfully operating at Tiger Global for twenty years and running most aspects of the firm, Shleifer saw Coleman set the stage for his exit less than 3 months after the release of the “memo”? How did LP reactions to the “memo” influence Coleman’s decision and why did the firm not directly refute the many detailed allegations found in the “memo”? Wouldn’t that have been the best strategy to prove that the individual allegations were, in fact, not true and thus assuage LP concerns rather than blustering and calling the entire memo fake news?
4. Why is the official rationale behind Shleifer’s transition internally inconsistent? If Coleman says the whole investment team needs to be in New York and thus Shleifer must become a “Senior Advisor,” then why is Tiger Global now telling various LPs, according to our investigation, that Shleifer is “still an employee,” “still a partner,” and “is still very involved.” If Shleifer is stepping back because of a new rule Coleman created that investment team members must be domiciled in New York City, this rationale doesn’t make sense if Florida-domiciled Shleifer will still be a partner that is actively involved in the firm. According to Coleman’s communication with LPs, Florida-domiciled Shleifer will have the same role on Tiger Global’s investment committee as 3 other New York-domiciled partners. Tiger Global’s official rationale and subsequent clarifications to concerned LPs are contradictory.
5. If Tiger Global is announcing that the head of the PIP funds and key decision-maker is “stepping back,” why announce it immediately before the Thanksgiving holiday, making it difficult for LPs to quickly ascertain what has transpired? This is likely the most important announcements that Tiger Global has ever made according to our investigation – why not announce it at the start of business on Monday so LPs can quickly get in front of the firm and have their questions answered? Was Coleman hoping that LPs would be distracted by the Thanksgiving holiday?
6. How was the new investment committee structure decided upon and how were the specific individuals on the committee chosen? The track record in private investments for the new investment committee members ranges from non-existent to very poor, according to our investigation.
7. What will happen to the Tiger Global Long Opportunities fund, a multi-billion dollar public investment fund, with Shleifer’s transition? According to our investigation, over the years, Shleifer had been the only partner managing Tiger Global Long Opportunities Fund as its sole portfolio manager in practice.
8. Will Tiger Global be offering its PIP 16 LPs the one-time opportunity to cancel their commitment without any penalties given the head of the business is exiting his role only a few months after the fund’s close? This question came up several times during our investigation.
9. How is fundraising for PIP 16 progressing? Our investigation shows that Tiger Global told a CNBC reporter in late August that the close in June of $2 billion was only an initial close and that Tiger Global was planning to continue to raise much more in order to achieve its fundraising target. Why announce that the head of the business is stepping back right in the middle of the fundraise for that business? Was Tiger Global’s communication with the press candid?