Losses at Tiger Global Management reached 52 per cent this year, prompting the firm to cut management fees and create separate accounts for the illiquid wagers of customers who want to redeem, media reports said.
Tiger Global’s hedge fund sank 14.2 per cent last month, buffeted by losses in several stocks and substantial markdowns in its private assets, according to an investor letter seen by Bloomberg News and a person with knowledge of the matter.
As the value of its public holdings plummeted, Tiger’s exposure to illiquid venture capital bets comprised too much of its portfolio — leading the firm to tell investors in its hedge and long-only funds that, if they wish to redeem, their private investments will be placed in a separate account that will be cashed out at a later date. The manager is also cutting its management fees by 50 basis points till December 2023.
“We take very seriously that our recent performance does not live up to the standards we have set for ourselves over the last 21 years and that you rightfully expect,” the New York-based firm wrote in a letter to investors, Bllomberg reported. “Our team remains maximally motivated to earn back recent losses.”
Hedge fund managers known as Tiger Cubs made billions riding tech stocks to dizzying heights. In recent years, many added illiquid venture capital holdings to their portfolio, hoping to capitalise on soaring valuations and a hot market for initial public offerings. Instead, years of gains evaporated as the markets turned violently against them in the first quarter. The tech-heavy Nasdaq Composite Index has lost 23 per cent this year and the S&P 500 is down 14 per cent.
Tiger Global’s hedge fund has lost money every month this year, putting it on track for its worst annual performance ever. By April, the hedge fund’s 44 per cent tumble, along with losses in its long-only and crossover funds, wiped out about $16 billion. Last year the hedge fund dropped 7 per cent, Bloomberg reported.