Chase Coleman — Tiger Global

Tiger Global Chase Coleman

Chase Coleman: Background & bio

36-year-old Charles Payson “Chase” Coleman III manages Tiger Global Management, which oversees some $16 billion. His Tiger Global hedge fund, managed by Feroz Dewan, returned 17% net of fees in 2014, making it a top-performing hedge fund. The hedge fund also beat the market and the vast majority of hedge funds in 2011 and 2012, before cooling off somewhat in 2013.

Coleman’s venture capital arm continues to raise significant capital to invest in fast-growing private tech companies like Facebook while they are still privately held. On January 1, 2015, Tiger Global launched Tiger Global Internet Opportunities (“TGIO”) with approximately $700 million of total capital. TGIO focuses on long investments in the Internet and all of its subcategories. In addition, TGLO reopened on January 1st and now has a fund size of approximately $2.3 billion.

Tiger Global previously invested in Alibaba Group when it was a private entity and continues to benefit from the company’s public listing.

A “Tiger Cub” who trained at Julian Robertson’s famed hedge fund shop, Tiger Management, Coleman serves as co-chair of the Tiger Foundation, which Robertson started to battle poverty in New York City. Coleman is also co-chair of the investment committee for the Hospital for Special Surgery in New York.

Chase Coleman is somewhat of a recluse and there are few pictures available of the hedge fund star — according to Bloomberg, he wants to keep it this way.

Chase Coleman: Tiger Global

At the end of 2014, $1.00 invested in Tiger Global at inception in March 2001 would be worth $16.06 net of fees. Tiger Global has generated compounded annual returns of 27% gross and 22% net over that period, as compared with annual returns of 6% for the S&P 500, 6% for the MSCI World Index, and 7% for the Nasdaq Composite.

Like almost all Tiger Cub funds, Tiger Global uses a long/short strategy. During 2014, this strategy paid off with the fund’s European short positions paying off big time.

Tiger Global has shorted at least 12 European companies since 2012 and set up offshore funds to sidestep the UK rule requiring public disclosure of short positions, which was enacted after the 2008 stock market meltdown. Because short selling is so risky, hedge funds convinced US regulators not to force them to disclose their shorts publicly. Almost three-quarters of the fund’s open short positions were devoted to struggling UK technology companies, Quindell, and Monitise.

One important theme in Tiger Global’s portfolio, today is consumer Internet, most notably e-commerce and online classifieds. Over the past 13 years, Tiger Global has invested in more than 100 e-commerce and online classifieds businesses its public and private equity funds, which provides the fund with unique insights that help inform investment decisions today.

Much of Tiger Global’s current exposure to consumer Internet is in China, where limited offline infrastructure and the rapid proliferation of desktop and mobile Internet have enabled companies to achieve unprecedented growth and market share.

Another theme in  the portfolio of Tiger Global is the growth of high-speed broadband. In most developed markets, broadband Internet access is provided by a local cable company and is often bundled with TV and landline telephone services. The bulk of a customer’s monthly cable bill reflects the cost of television content with a smaller portion going towards high-speed Internet access. As demand increases for bandwidth-intensive services like video streaming, Tiger Global believes that a monopoly providers of high-speed Internet will have pricing power, encouraging further consolidation within the industry.

Tiger Global tries to avoid “exogenous variable risk,” when making investments, minimizing exposure to industries with unpredictable regulatory environments and companies that are overly cyclical or highly dependent on commodity prices.

The fund’s investment process remains focused on bottom-up stock picking and fundamental research, helping it act with conviction when macroeconomic events result in short-term dislocations in security prices.

Chase Coleman: Articles

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