Hedge funds and managers with venture capital arms continue to mostly shun the private markets.
Several firms known for being active in VC showed a slight uptick in transactions in the first quarter, but the volume of deals pales compared with the frenzied activity of a few years ago, according to data tracked by Crunchbase. Others chose to sit out the quarter altogether.
And given the stock market’s current tariff-induced free fall, the VC market is not likely to improve anytime soon.
Hedge funds and other cross-over funds had been a significant source of money for start-ups. Multistrategy hedge fund firm Balyasny Asset Management is one high-profile exception. As Institutional Investor reported in March, the manager has been raising money for a new dedicated venture capital fund since January and hopes to raise $350 million. But many investors are still spooked from the bear market in 2022, when private company valuations were heavily marked down. And as long as the stock market continues to tumble or at least remains volatile, the IPO market will not reopen, a major source of monetizing and exiting private investments.
That said, a few major players did slightly increase their activity in the first quarter.
Tiger Global Management, which has a separate VC arm, made at least 15 new private investments in the first quarter, by Crunchbase’s count. This is the most it has made in any quarter in nearly three years. The firm, which has historically favored technology, internet, and consumer companies, initiated seven new investments in the fourth-quarter of 2024, four in the third quarter, and eight in the second quarter.
Of course, several years ago, Tiger Global was the VC leader, having made 289 and 345 investments in 2023 and 2022, respectively, according to the database. In late 2023, Scott Shleifer, who headed VC, stepped away from the effort.
Most recently, Tiger Global led the $146 million Series C funding round for software firm Temporal Technologies. The financing valued the company at $1.72 billion, giving it unicorn status.
Coatue Management, perennially the second-most active VC player, initiated just six new investments in the first quarter, compared with ten in the last quarter of 2024, 11 in the third quarter, and 15 in the second quarter. The firm, which also gravitates to tech, internet, and consumer businesses, has a separate VC arm.
In 2021, Coatue made at least 170 new private investments, according to Crunchbase. In late March, it led a $250 million Series E financing round for browser company Island. This lifted the company’s valuation to $4.8 billion.
Otherwise, few of the hedge fund firms that have made tech-related deals in the past made any in the first quarter.
D1 Capital Partners made two new investments, and Maverick Capital and Two Sigma each made one. Light Street Capital Management, Lone Pine Capital, Whale Rock, and Third Point did not make any investments during the quarter, according to the database.
Hedge fund firms that specialize in biopharma and life sciences investments were a little more active in the first quarter, but still a fraction of the transactions they did previously.
For example, RA Capital Management, generally the busiest private investor, initiated only eight new investments in the first quarter. This compares with 18 in the fourth quarter of 2024, nine in the third quarter, and 22 in the second quarter. It made 46, 44, and 82 new investments in 2023, 2022 and 2021, respectively, according to Crunchbase.
Perceptive Advisors made just four new investments in the first quarter after making 44 in 2024. Cormorant Asset Management made six new investments last quarter, more or less in line with its historical activity. RTW Investments made six new private deals last quarter, basically matching its usual activity.
This story was updated on April 24.
