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Behind Tiger Global’s Blowout Gains
The Tiger Cub has enjoyed a huge boost this year from its China-related longs.

Tiger Global Management notched another strong monthly gain in what is shaping up to be another stellar year for the firm headed by Tiger Management protégé Chase Coleman and Scott Shleifer.
Its long-short fund, Tiger Global Investments, surged 6.6 percent in April and is now up 27.5 percent for the first four months of the year, according to an investor. As a result, Tiger Global continues to cement its status as one of the top-performing hedge funds.
Meanwhile, in the first quarter Tiger Global Long Opportunities, its long-only fund, posted a 19.1 percent gain, according to the firm’s first-quarter letter, obtained by Institutional Investor. Tiger Global declined to comment.
In just the first quarter of this year, the hedge fund’s long book posted a 28.2 percent gross gain, while its short book suffered only a 3.7 percent loss — a moral victory in a surging stock market, according to its first-quarter exposure report also obtained by Institutional Investor.
In its letter, Tiger Global boasts it “generated meaningful alpha” in its short book.
The firm said that in the first quarter, nearly every long position made money.
It was led by its three largest positions: Japanese investment giant Softbank, software and cloud giant Microsoft, and social media pioneer Facebook.
The firm’s long book also enjoyed gains from commercial and military aerospace components maker Transdigm Group, e-commerce giant Amazon, and Chinese e-commerce giant Alibaba Group Holding.
Tiger Global especially benefited from its China-related positions, which account for more than 20 percent of its equity assets. It pointed out in the letter that after a rough second half in 2018, many of these stocks rebounded sharply in the first quarter. SoftBank; Alibaba; Chinese e-commerce giant JD.com; TAL Education, which provides after-school tutoring programs for primary and secondary school students in China; and New Oriental, a provider of private educational services in China each surged between 30 percent and 65 percent in the first quarter, according to the letter.
In last year’s third-quarter letter, Tiger Global said China has become “a leader in innovation” and “the most advanced internet market in the world by most measures.”
“Despite the unresolved trade war between the U.S. and China, the most recent economic indicators coming out of China have been encouraging,” Tiger Global told clients in the first-quarter letter. “More importantly, fundamentals in many of the Chinese companies we diligence remain robust, and we believe these businesses present attractive investment opportunities over the long term.”
Tiger Global also reminded investors its long and short exposures were reduced throughout the fourth quarter. Many stocks fell so much that it covered many of its short positions.
By the first week of this year, the hedge fund reached one of its highest ratios of long to short positions and one of its lowest levels of short exposure in its history, at less than 40 percent. But as the markets took off in the first quarter, Tiger Global added to its short portfolio and reduced several long positions that performed well, it disclosed.
It also established several new positions that it did not disclose. Those will be made public when Tiger Global’s 13F filing for the first quarter becomes available next week.
Tiger Global is also building up its short portfolio. The firm added, “We continue to spend a large portion of our collective research hours working on new short ideas and are pleased to have several new themes in the portfolio with additional capacity as prospective returns improve.”