by Nihar Sheth
Everybody has heard of Tiger Global these days. But the firm and its founder, Chase Coleman, are notoriously secretive… so I did some research on the backstory.
Everything you need to know about Chase Coleman and the rise of Tiger Global (warning: long thread) ?
1/ Coleman was born into wealth, and he was childhood friends with Julian Robertson’s son on Long Island.
His first job out of college was as an analyst for Robertson at Tiger Management.
2/ He covered tech for Robertson, and made partner within just three years. Most other partners were far older.
Clearly, he was a gifted analyst from the get-go.
3/ When Tiger returned outside capital in March 2000, Coleman stayed on to manage Robertson’s personal wealth until March 2001, when he launched Tiger Global (then called Tiger Technology) with $25m in seed funding from Robertson.
He was 25 years old at the time.
4/ There’s a huge advantage in life to figuring out what you want to do early, and just going for it.
Coleman didn’t spend time “paying his dues” in consulting or banking – he became an investor right out of the gate.
Obviously, easier when you’re buddies w/ Julian Robertson.
5/ Tiger Tech started out as an L/S tech-focused hedge fund, and Mar ’01 was not a popular time to launch a tech fund.
But as Coleman reflected in a recent investor letter, they came to the insight that Internet “market leaders could achieve very high returns on capital”
6/ and for the entirety of Tiger’s existence, they have invested behind that thesis.
Their genius was coming to this insight years before the market understood how good the economics of leading Internet/software businesses can be.
7/ Perf. was good from the start. It was helped by early investments that Scott Shleifer (joined in ’02 from Blackstone, also age 25) made into China’s 3 leading Internet portals: Sina, Sohu, and Netease.
8/ This was the start of a differentiated focus on Asian tech that drove returns for next 2 decades.
Other early hires included Neeraj Chandra (Untitled), Caleb Watts (Atlantic), and Feroz Dewan (Arena). All were in their 20s when they joined Tiger.
9/ Coleman later wrote that “we are grateful to have begun our investment careers at a time when the Internet era was just beginning… inexperience may have been an asset when it came to imagining what a new internet-connected world could look like.”
10/ The sense I get is that the Tiger of the early 2000s was young, hungry, and aggressive – which probably enabled them to develop conviction around highly differentiated bets.
11/ They also developed a reputation for doing really deep work – knowing a business better than anybody else before investing.
There are some indications that this has changed in the private equity biz in recent times.
12/ In 2003, Tiger launched their private equity biz. The first fund raised $76m. This was long before “crossover” funds were the norm.
Early private investments included $FB, LinkedIn, and very famously, $JD, of which they still own $4B+.
13/ In 2006, they hired Lee Fixel (also in his 20s), who went onto run their private equity biz. Fixel led Tiger’s famous investment into Flipkart, and more broadly into India.
He also led investments into $PTON, Stripe, Eventbrite, Juul, etc.
14/ And in 2009, they hired Alex Captain, another 25 y/o out of Blackstone, who now runs $2bn+ Cat Rock Capital.
15/ Tiger hit a rough patch in 2014-2015, though, when Dewan, Watts, and Captain all left. At the time, AUM was ~$20bn, split 50-50 across public and private.
Fixel then left in 2019 to start Addition. However, it seems none of these departures hurt Tiger LT…
16/ As of today, Tiger’s L/S fund has compounded at 21% net since its ’01 inception, with only two down years (’08 and ’16).
17/ The private equity group has done even better, with a 26% net IRR across its funds since inception.
18/ Total AUM is $79bn, and they are currently raising another $10bn venture fund.
Chase Coleman is personally worth $10bn+ and Shleifer is also a billionaire.
19/ Tiger also has only 100 employees. Compare this to Two Sigma, which manages ~$60bn with 1600 employees, or Citadel, which manages ~$35bn with 1400 employees.
The stockpicking biz has serious operating leverage.
20/ For clues to Tiger’s future, look to their office locations: outside the US, they are in HK, Beijing, Singapore, and Bangalore.
They have no London or European offices. The future of Tiger is in Asia.
21/ Tiger’s rapid pace of capital deployment & seeming indifference to valuations in the private equity group lately has been likened to Softbank. Many have questioned whether it is a shift away from the deep diligence and discipline that made Tiger successful.
Time will tell.
22/ What is certain is that Tiger has assembled one of the great investment track records of the last two decades, built around:
– early realization of the economics of Internet/software
– focus on Asia
– willingness to invest in privates
We’ll see what the future holds!