(Bloomberg) — Tiger Global Management’s hedge fund gained just 0.4% in July, narrowing its loss this year to 49.8%, according to people familiar with the returns.
The fund trailed broader markets, with the S&P 500 advancing 9.1% and the tech-heavy Nasdaq Composite Index surging 12%.
Chase Coleman’s firm underestimated the impact of rising global inflation and entered 2022 with too much exposure, Tiger told investors in a letter Wednesday.
“We did so with a view then and now that the industries and companies in which we invest are deflationary over the long run,” the firm wrote. “We did not appreciate how unique the circumstances were that enabled inflation to rise and persist, and our portfolio composition and exposure levels were not well-suited for the volatility that followed.”
July’s results follow a 3.4% gain in June that was preceded by five straight months of losses, as Tiger was stung by sharp declines in some of its biggest equity holdings and the markdown of some venture-capital investments.
Tiger Global’s long-only fund rose 4.6% in July, paring its loss for the year to about 62%, people said.
A spokesperson for New York-based Tiger declined to comment.
Private Companies
“We further marked down the valuations of private companies in our portfolios, despite adequate cash positions and positive operating performance overall,” it wrote.
Coleman, 47, is among several so-called Tiger Cubs — named for money managers who previously worked at Julian Robertson’s Tiger Management — that have struggled this year as surging inflation, rising interest rates and war in Europe have crushed equity markets.
Tiger Global, with a bent toward tech stocks, was at the sharp end of the equity slump. Its bets include stakes in beleaguered used-car platform Carvana Co., whose shares have plunged 85% so far this year, and digital bank Dave Inc., which has plummeted 93%. The fund also had positions in Netflix Inc. and Shopify Inc., which have also cratered.
It’s not the only Tiger Cub fund seeking to turn around a difficult start to the year. Steve Mandel’s Lone Pine Capital posted a 7% gain for its hedge fund in July, following the broader market higher and paring its 2022 decline to 33%. In June, Philippe Laffont’s Coatue Management broke even to hold its losses through the first six months of the year at 17%.
(Updates with details from investor letter starting in third paragraph.)
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