Over the past year and a half, Tiger Global Management, a New York-based hedge fund, invested upwards of $20 billion in technology companies. However, as stock and private valuations took a nosedive for the worst, Tiger Global was left high and dry, forced to mark down the value of its private investments by a reported 24%, equating to a whopping $42 billion reduction in assets.
Tiger Global's crossover fund (which invests in both public and private equities) reported a 36% decline while the hedge fund's flagship fund reported a staggering 50% decline in value. The Company, founded in 2021, has ~$125 billion in total assets under management (AUM). The hedge fund's private equity vehicle alone has ~$13 billion in AUM. This fund has been marked down by almost 25%. Private equity valuations are notoriously opaque given both their private nature and subjectivity of valuation methodologies.
The fund's managers have taken actions to reduce volatility and insulate the hedge fund from inflationary pressures, interest rate increases, and geopolitical impacts -- which it blames as the culprit for its waning performance and heavy markdowns. Tiger Global has also said that it did not fully hedge against market volatility in its public stocks, increasing pressure from investors.
The Company is heavily exposed to tech, crypto, and China-based stocks - which have all taken a nosedive over the last few months. Tiger Global, along with other Wall Street firms, has cut its exposure to China, as Xi Jinping continues to tighten his grip on the country's economy.
What's more, Tiger Global was a prominent investor in FTX, Sam Bankman's cryptocurrency exchange that went defunct and its $38 million investment is now worth $0. The Company took part in FTX's Series B and Series C investment rounds, which valued FTX at $25 billion and $32 billion, respectively. The Company is also known to hold large positions in once high-flying tech stocks such as Stripe and Instacart, which have suffered the most with increased interest rates.
As Tiger Global's tech and crypto bets take a turn for the south, it's unclear whether its portfolio will rebound as economic conditions improve or wither the market highs were a pandemic-induced anomaly.