Image source: Bloomberg
The Hedge fund Tiger Global Management has said to have reduced the value of its private funds by close to 25% this year, causing one of the largest-ever asset drops in the sector at $42 billion putting he fund is serious trouble.
The fund saw about $43 Billion as of the end of summers, and this is from over $65 Billion at the end of the year.
Hedge Fund Tiger Global has had a rough year in 2021 and an even rougher year in 2022 so far. The hedge fund’s long only fund has lost 24.9% in April and is now down a total of 51.7% so far in 2022. This means that Tiger Global’s 2020 gains of 48% have now been completely erased. Tiger Global’s losses are breaking records and are among some of the largest losses in the history of hedge funds. So what does this mean for Tiger Global — what is the cause of the dramatic losses and how much can they really afford to keep losing?
WHY IS TIGER GLOBAL LOSING MILLIONS?
Tiger Global has been burned by their large stakes in tech companies as well as their short positions. Last year Tiger Global had about 35 billion in overall public equities and by 2022 they had experienced a loss of about 15 billion. Reports indicated that since there have been 82 active trading days from the beginning of January – April, this means that Tiger Global has lost about $183 million every trading day — which equals out to about a loss of $28.1 million in losses per hour. If investors with Tiger Global weren’t panicking last year, they should be this year.
WHAT IS NEXT FOR TIGER GLOBAL?
I’m sure we can imagine that Tiger Global CEO Chase Coleman is under serious stress as his hedge fund continues to try to put out fires and recoup losses. As their losses continue, investors are only going to become more upset and the chances of investors wanting to pull out their money is likely to increase. If investors begin to pull out their money, Tiger Global could run into some liquidity issues.