Tiger Global Management was founded by Charles Coleman, one of the ‘Tiger Cubs’. Tiger Cubs or Seeds are those hedge fund owners who once worked under or received funding for launch of their individual hedge fund from Julian Robertson, the famous investment guru and the founder of Tiger Management. The firm was established in 2001, and since then, it has successfully returned an annualized return of 21%. As of now, it manages $4.4 billion worth of assets.
Tiger Global manages hedge funds and private equity funds by investing in local and global public and private equity markets. It also invests locally in income markets. As the name suggests, Tiger Global conducts its business globally. The firm primarily focuses its investments in China, Southeast Asia, Latin America and Eastern Europe. In addition to having headquarters in New York, it has offices in Beijing, China and Mumbai, India. In 2009, the office in India temporarily shut down operations; however, it restarted operations after a hiatus of one year.
Tiger Global has, as of 2011, six private-equity funds, with the latest one announce in January 2011. It was declared that Tiger Global is aiming to raise $1.25 billion for the latest fund to increase its stake in Facebook. He launched his very first fund in 2003. Tiger Global’s fifth fund, which was started in 2008 with $1.1 billion, has returned an average of 15% since inception. This fifth fund was established to purchase a 1% stake in Facebook for $164 million. Coleman is known to shy away from press and avoid discussing stakes in private companies, however, his investment in Facebook has gathered a lot of media attention as most believe he his stake in the social networking site currently valued at $50 billion gives him access to private information about the company financials. Moreover, the firm is known for its long position in Apple, Google, and LinkedIn. Coleman’s other major investments include E-Commerce China DangDang, Inc., and Youku.com, Inc.
The investment style of Coleman is sophisticated as he invests a significant amount of cash in illiquid tech stocks and start-up companies. His investment decisions prove to be timely and fruitful as proved through his purchase of Facebook when it was worth half of what it is now, and of LinkedIn, which has now in 2011 filed to go public.
He adopts a fundamental analysis approach and the firm Tiger Global specializes in long-short equity. The firm’s typical investment sectors include real estate, telecommunications, energy, media, and retail. Tiger Global conducts its business of investment by co-investing with local funds to bet on emerging markets. Internationally, Coleman makes numerous small venture investments along with large growth or late-stage investments.
Brazil, India and China are the emerging market countries which are heavily invested in by Coleman. His global portfolio includes Brazilian social game developer Vosto and sports retail company NetShoes, Russian search portal Yandex, Turkish shopping website Trendyol, Chinese e-commerce venture Dangdang and television company Touku.com, and many Indian e-commerce ventures.
According to the latest 13F filings of first quarter ending March 2011, the Tiger Global Management portfolio reveals Coleman’s concentrated investment style as 61.4% of the portfolio is made up of companies belonging in the consumer services sector while 18.8% of the portfolio is made up of companies of the technology sector. With the top 5 companies of the portfolio being Apple, Viacom, DirecTV, Liberty Global, and Liberty Capital Group, it is evident how his top holdings are technology stocks, a sector which he specializes in since his days at Tiger Management working under Julian Robertson.
Charles Coleman is one of the 30 alumni of Julian Robertson, the investment guru and founder of Tiger Management. Lee Ainslie founder of Maverick Fund, Andreas Halvoren founder of Viking Capital, and Stephen Mandel founder of Lone Pine Capital are all Tiger Cubs. Therefore, as a ‘Tiger Cub’, the success of Charles Coleman is not surprising. Interestingly, Charles Coleman is a descendant of the last Dutch governor of New York, Peter Stuyvesant, who built the ‘wall’ of Wall Street. He is on the Forbes list of next generation billionaires, which is justified considering the fact that he takes home $350 million to $400 million every year.
Prior to founding Tiger Global Management, he was the technology analyst at Tiger Management from 1997 till Robertson closed his hedge fund of $6 billion to outside investors in 2000. Later in 2001, with the funding received from Robertson, Charles Coleman established his very own hedge fund named Tiger Global Management. It was one of the very first funds seeded by Robertson. By the end of 2007, Tiger Global, with its technology sector focus, realized a seven-year annualized return of 44% with the fund returning 91% that year. It had $6 billion in 2007 however in 2008 it dropped 26% and further dropped 1% in 2009. In 2010, Tiger Global got back on its feet by climbing 18%. Tiger Global was one of the best performing hedge funds in 2010 as it returned at least 70%. As of today, his hedge fund Tiger Global has $4.4 billion under management and has successfully realized annualized returns of 21% since its inception.
Coleman manages six private-equity funds under Tiger Global. His first fund was started in 2003 with $75.8 million as initial capital. Youku.com, China’s largest online video company was one of the initial purchases made with that fund. In December 2010, Youku realized the highest first-day gain for a U.S IPO in five years as the price more than doubled from an IPO price of $12.80 to $32. Excluding the newly launched sixth fund of Tiger Global, Coleman has raised more than $2.5 billion for previous private-equity funds in order to purchase stocks in Facebook and LinkedIn. One has to be highly proficient in order to be starting a sixth hedge fund, but Charles Coleman has no problem in that regard. His fifth fund which started with $1.1 billion as capital, realized an annual average return of 15% since its launch in 2008.
In January 2011, Coleman announced the launch of his sixth fund with aims of raising $1.25 billion as initial capital. As Bloomberg reported, $80 million from the sixth fund is for increasing stake in Facebook. The purchase of Facebook by Coleman has gain high public attention over the years. As revealed by BusinessInsider, Charles Coleman has ownership of Facebook stocks which gives him special information rights. Facebook being a private company does not have to reveal its financials to the public, thus, despite being stakeholders, the financial information of the company is unknown. However, Coleman holding information rights gives him an upper hand over other investors as he has access over Facebook’s financial information. Charles Coleman, being press-shy, hardly discusses his private-equity investments therefore the public is unaware of how he acquired these special rights, how much stake he has in Facebook, and how much he has made from his investment. However, some speculate Coleman purchased 3% stake in Facebook in 2009, from Peter Thiel, who at the time was selling half of his 6% stake in famous social networking site. In 2009, when Coleman presumably purchased the 3% stake from Thiel, Facebook was worth $20 billion, $30 billion less of what it is worth today. Holding that as true, it is possible for Coleman to have made $900 million for his clients in 2010. Bloombergstates, Coleman spent $165 million from his fifth hedge fund to purchase a 1% stake in Facebook from December 2009 to June 2010. Coleman is known for investing in high-growth or start-up companies. Apart from Facebook, he is also among the first few to invest in LinkedIn. The networking site for professionals has recently in 2011 filed to go public.
Tiger Global not only invests locally but internationally. Some of his high returning investments have been in emerging markets of Brazil, China and India. Coleman has actually set up offices in Beijing, China and Mumbai, India. In mid-2009, he closed down his office in India only to return after a year of hiatus to gain from the rising e-commerce ventures. Most of his investment dealings in India are done through co-investments by establishing partnerships with local firms having extensive knowledge of the emerging market. Accel Partners India and Helion Venture Partners are two of the venture capital firms of India Tiger Global chiefly carry out co-investments with. Accel Partners have actually co-invested three out of four of Tiger Global’s local small venture dealings in the past year. Tiger Global’s previous investments have included MakeMyTrip, a travel website, and Just Dial, an online directory of India. Both companies were pioneer in their respective market sector. Some of the recent investments by Coleman include online ventures like Flipkart.com, Exclusively.in, eTree Marketing, Myntra Designs, and Mom Supplies which is run by babyoye.com. The e-commerce market of India is expected to increase 47% to $10.3 billion in 2011 according to Internet and Mobile Association of India as mentioned by WSJ. With the successful investment experience in the emerging markets of China and Brazil, Coleman seems to have proficient know-how of what to do and where to invest in the Indian market. Tiger Global has the largest position in MakeMyTrip which completed an IPO in US with a price of $14 which has now more than doubled.
Coleman is already taking advantage of the emerging market by investing in Brazil’s online sports retail company Netshoes, Groupon rival Peixe Urbana, and Vostu, a social game developer. The Brazilian e-commerce market is expected to increase annually by 18% from $7.9 million to $22 billion by 2016. The e-commerce market of China is also on the rise and Tiger Global has invested in e-commerce venture China Dangdang and Youku.com which is an internet television company in China. Youku went from and IPO price of $12.80 to $32 recently Dangdang when from an initial IPO price of $16 to above $22. Just recently in June, Tiger Global agreed to invest $40 million in Sun Art Retail Group which is a Chinese hypermarket operator with backing from Groupe Auchan, a French company. Talking of recent investments, Coleman has invested in a Russian online ticket booking site Anywayanyday.com. He has reportedly purchased a 40% position in the online ticket booking site for $10 million. Moreover, he has further invested in a Turkish shopping website Trendyol.
As of quarter ending March 2011, the Tiger Global Management portfolio revealed Coleman’s highly concentrated investment style with 61.4% of his stocks belonging to the consumer services sector. 18.8% of stocks belong to his favorite technology sector while the remaining is in the financial, industrial and the consumer goods sector. 11.98% of his portfolio is made up of Apple Inc., Tiger Global has 1.42 million shares of the company which is valued at $493 million. 8.94% of the portfolio is made up of Viacom Inc. with 7.91 million shares worth $368 million. Liberty Global makes up 6.52% of the portfolio with 6.48 million shares valued at $268 million and 6.49% of the portfolio is made up of Mercadolibre with 3.27 million shares of value $267 million. Furthermore, 6.17% is made up of Amazon.com with 1.41 million shares valued at $253 million. Other companies included in his top 10 holdings at the end of first quarter 2011 are DirecTV, Liberty Capital Group, cablevision Systems Corporation, Priceline.com, and MasterCard.