The assets under management at investment firm Tiger Global have exploded in recent years. Now the company is taking stock and making its operations transparent, according to a new investor letter seen first by Axios and subsequently obtained by londonbusinessblog.com.
Most importantly, in the absence of other options or – just as likely – in response to the changing market landscape, the company has informed its limited partners that it plans to raise $6 billion for its latest fund, for which it expects a “close first” at least in mid-January. (As an additional sweetener, investors will receive a reduced management fee of 1.75% on first close, the letter states.)
While it’s still a lot of hassle, $6 billion is less than half of the $12.7 billion that Tiger Global got from investors in March of this year, money it started investing last fall and broke through quickly. (A source familiar with the company says it is still investing out of that vehicle.)
The capital that Tiger Global employees put into the new fund is also shrinking. While employees contributed $1.5 billion to Tiger’s $12.7 billion fund, or 12% of the total amount, this time they commit to invest a minimum of $500 million in the $6 billion effort, or something less than 9% of the total amount. (This may increase.)
What isn’t shrinking is the size of Tiger Global’s bank, the company suggests. Although a lot was created On Monday after the departure of John Curtius, a software investor who joined Tiger Global in 2017, Tiger Global has a slightly larger team than it did at the beginning of the year, a source familiar with the company said. Indeed, in an investor letter also released Monday, Tiger Global said it has recently hired five new investors, including two individuals from Blackstone, two recent Harvard graduates and a fifth investor, Evan Stanleigh, who joined the company after seven years. years as a partner at the New York hedge fund Cadian Capital.
Anyway, the low-flying Tiger Global apparently didn’t like the attention Curtius drew as he walked out the door. He confirmed to The Information today that previously reported plans for him to stay with the 160-strong outfit until June have changed and he has already left. “Tiger is going to do amazingly well and I’m really excited about my next venture,” says Curtius told the outlet.
Tiger’s newest fund is the 15th, although it’s called Tiger Global Private Investment Partners XVI. (The outfit was a little superstitious when the fund hit 13, so skipped a song.)
Fundraising for the vehicle will certainly not be as easy as it has been in years past. The market has changed dramatically since the team was last in the market, and Tiger Global was hit particularly hard by the market downturn, thanks to an aggressive investment strategy that saw it writing huge checks on tech companies that are in many cases less valuable than they ever were. goods.
Hopin, for example, a struggling young virtual event company backed by Tiger is believed to be valued not around the $7.8 billion that investors valued during the pandemic.
Of course, like many investors who disagree, Tiger Global points to its historic returns and states in its new investor memorandum that since its inception in 2003, its funds have raised $36 billion and $30 billion (about $8 billion of that has returned to its investors in the past two years alone, a source close to the company says).
Tiger Global also says in that letter that it has a gross IRR of 34% and a net IRR of 24% dating back to the earliest days. (That net IRR is just 1% lower than it was earlier this year, according to an investor memo obtained by londonbusinessblog.com earlier this year, even though one might suspect it would be more given current market conditions.)
Tiger Global also says the remaining portfolio represents $45 billion in fair value, thanks in large part to still privately owned internet companies such as ByteDance, Shein, Stripe and Razorpay.
Whether those interests will be sufficient to convince current capital-limited investors remains to be seen. They have reason to have less faith in Tiger Global’s heavily outsourced approach, as the company itself immediately admits. “This is not a year where the scoreboard will make us proud,” the company said in its investor letter dated Monday. “[W]We have a lot of work to do to recoup the recent losses,” it added.
As always, Tiger Global will also have plenty of challengers to deal with, now including the company Curtius is reportedly founding. Named Cedar Investment Management, it is expected to compete in past deals with Tiger, whose average investment size, once overwhelming, has fallen to $30 million in the past year, the company says in its investor letter.
Editor’s Note: This piece has been updated to remove speculation about employee relocations within Tiger Global.