The liquidation of Bill Hwang’s Archegos Capital family office last month is inadvertently shedding new light on the secretive hedge fund family of Tiger Cubs, Seeds and Grandcubs to which he belongs.
Hwang may have shut down his hedge fund, Tiger Asia, after he settled insider trading charges from the Securities and Exchange Commission in 2012, but he wasn’t banished from the club of former acolytes of Tiger Management’s Julian Robertson.
In fact, Hwang invested at least $65 million in more than 20 other hedge funds with ties to Tiger Management, according to tax filings of the Grace and Mercy Foundation, Hwang’s charity, which had amassed over $470 million as of 2018. The filings show investments made between 2007 and 2017, the latest data available.
“This cross-Tiger fund investing goes on all the time,” said one individual familiar with the hedge fund family. “They use it as a way to access idea flow.”
Chase Coleman’s Tiger Global Management and Steve Mandel’s Lone Pine are the two most famous Tiger Cubs that Hwang invested with, the filings show.
Hwang and Coleman were both high-profile seeds of Robertson’s in 2001, but their paths have diverged since Hwang’s troubles with regulators led him to turn his hedge fund into a family office.
Coleman, meanwhile, has become one of the top hedge fund managers in the world. He made $2.5 billion last year, coming in third on Institutional Investor’s Rich List.
Hwang has been an investor in Tiger Global since at least 2007, but in 2011 and 2013 he reported redeeming some of his investment, earning about $1.3 millionon investments of $4.6 million.
He remains an investor in Tiger Global, according to an individual familiar with the hedge fund.
The Tigers are known for investing in a lot of the same stocks, and there is one such recent cross-over between Tiger Global and Archegos that got pummeled in the late March liquidation of Hwang’s family office holdings: GSX Techedu.
As of the end of last year, Tiger Global was the largest known hedge investor in GSX, the Chinese online education company that short sellers say is a fraud that was part of a short squeeze. Tiger Global fell 5.3 percent during March, according to an investor.
Mandel’s Lone Pine, one of the oldest of the Tiger Cubs, was in another one of the stocks that reportedly was part of the liquidation: Farfetch. Its Lone Cascade long/short hedge fund fell 10 percent during the quarter, as II previously reported.
Hwang’s foundation reported a distribution from Lone Cascade of almost $150,000 in 2018. A spokesman for Lone Pine declined to say whether Hwang was still an investor in the fund.
The total amount that Hwang invested in Tiger-related hedge funds, and their value now, is no doubt understated because the foundation doesn’t have to report its investments in the hedge funds unless it receives a distribution or redeems its capital. That also occurs if the fund shuts down, as a number of Tiger-related funds have done in recent years following what one source called a “bubble” in startups seeded by Robertson before the financial crisis.
Hwang’s biggest loss reported in the filings was Asia-focused Kelusa Capital, where he lost $2.2 million on a $6 million investment in 2010 —and more in later years. Kelusa is no longer registered with the SEC, an indication that it has either shut down or has sunk below $100 million and therefore is no longer required to register.
Other big losers were Thrax Management and Goshen Global, neither of which are currently registered with the SEC. Hwang lost more than $1.2 million on a Thrax investment of $4 million and $1.3 millionon his $2.5 million investment in Goshen. In 2011, he reported a loss of $1.1 million on a $3.5 million investment in DLH Capital, which is also not registered.
Hwang also lost money investing in Tiger funds Long Oar Global Investors, Cascabel Management, Saferidge Capital Partners, Axial Capital Management, and WRA Investment Partners — all of which are no longer registered with the SEC. In addition, he lost around $376,000 on a $1.5 million investment in Hound Partners, which remains an active hedge fund.
Meanwhile, the former Tiger Asia founder made money in White Elm Capital, Tiger Consumer Management, Tiger Veda Management, and Shumway Capital, which have since shuttered. Hwang also took gains in still-active Discovery Capital Management, Miura Global Management, and SRS Investment Management.
In addition to investing in hedge funds, the foundation has also held investments in stocks popular with the Tiger crowd, including Amazon, Facebook, Netflix, and Apple.
But the Grace and Mercy Foundation appears to be more of an asset gatherer, making around the minimum amount of donations each year. In 2018,it reported qualified distributions of only $20 million — or less than 5 percent of its assets —to various charities, most of them related to Christian organizations.
A spokesman for Hwang did not return a request for comment by presstime.