Intelligencer: Masters of the Bubbleverse

NY Mag Intelligencer headline: Masters of the Bubbleverse Secretive hedge fund Tiger Global changed the rules on tech investing. Then it all went bad.…

At the end of last year, Tiger Global had become one of the biggest firms of its kind — it operates a hedge fund, a long-only fund, and several venture-capital funds — in the world. Including the debt it employed, it was managing about $125 billion with an investment staff of 52 people, according to a filing with the Securities and Exchange Commission. (Excluding debt, it had $95 billion.) A year earlier, Tiger Global’s hedge fund had topped a widely followed industry performance list — making some $10.4 billion for investors during the pandemic year of 2020, when its tech bets skyrocketed. By almost any metric, it was one of the most successful players in an extremely crowded and competitive global industry. At the time, Coleman was only 45, the youngest hedge-fund manager to ever make the list. His net worth would soon hit an estimated $10 billion.

But what happened to Robertson’s fund and what happened to Coleman’s are almost mirror opposites. Robertson lost money because he refused to invest in the bubble — the old-economy stocks he prized were out of favor, while speculative technology companies soared in value. Coleman has lost money in 2022 because Tiger Global investments were key to making speculative tech stocks go up, and the firm got hurt badly when those same positions started going down. “Tiger Global is the center of the growth bubble,” says a hedge-fund manager who has ties to the Tiger clan. Like many others interviewed for this article, he requested anonymity because he feared repercussions from the firm. Several others call Tiger Global “the poster child” of the tech meltdown, both because of its own role and because its success engendered a lot of imitators. Well-known Tiger investments such as Peloton, Roblox, Uber, Robinhood, Warby Parker, and Carvana have been among the biggest losers in U.S. markets — in some cases down more than 90 percent.

This year, Tiger Global’s hedge fund fell an astonishing 52 percent through May, according to an investor letter – much more than the overall market (down 20 percent) or the tech-heavy Nasdaq (down 33 percent). Its long-only fund has fallen even more — some 60 percent this year. **That means Tiger Global has lost about three-quarters of the gains made for investors since launching the hedge fund in 2001, according to calculations from data provided by Rick Sopher, chairman of LCH Investments in London. The total combined losses in the hedge fund and long-only fund based on Sopher’s analysis are about $19.7 billion.**:eyes:


Tiger Global’s move into venture capital, led by Shleifer, started in China in the firm’s early years before coming to include U.S. companies. It focused on revenue growth as the key metric (versus, say, profits) and would become a template many other VC firms soon followed. (Tiger Global famously backed Facebook and LinkedIn, two early winners.)

Silicon Valley insiders often bemoan the idea that Tiger Global threw money at tech start-ups with a size and velocity that changed the industry for the worse. “Balls to the walls” is how one of its investors described the firm’s approach. In recent years, Tiger Global seemed increasingly to dominate the VC world. In 2021, it backed a dizzying 335 deals, more than one investment per business day. “Tiger Global took the crown as 2021’s top investor,” venture-market-intelligence firm CB Insights wrote, meaning that Tiger Global made the most investments during that year.

“Tiger could be a little bit more aggressive. They could move quicker. They paid higher prices than a lot of their venture peers,” says hedge-fund consultant Greg Dowling of Fund Evaluation Group. “And that worked really well until everybody else started following the same strategy. They got bigger, which means you had to put more money out. Prices got higher. And so at some point, it stopped working.”