Chase Coleman Let the Tiger Out of the Cage in Q1 With Hot Returns

Investors are carefully divining the latest SEC 13F filing from Chase Coleman’s Tiger Global Hedge Fund reporting its latest trades and movements for the March quarter.

Born from the ashes of the dot-com bubble, Tiger Global rose to prominence in the early 2000s under Coleman’s unwavering leadership. Armed with an uncanny ability to spot tech disruptors before they hit the mainstream, the hedge fund amassed a breathtaking track record of success.

From Facebook, now Meta Platforms (US:META), to LinkedIn, Spotify (US:SPOT) to JD.com (US:JD), Tiger Global’s investments read like a who’s who of the digital revolution. Coleman’s reputation as a kingmaker was sealed.

Yet, as with any tale of extraordinary success, the shadows of skepticism began to loom. Critics questioned the sustainability of Tiger Global’s meteoric rise. Was it a product of sheer brilliance, or were Coleman’s tactics a house of cards ready to crumble?

Brushing Off Naysayers

Detractors point to the fund’s concentrated holdings and risk-heavy bets, warning of an impending reckoning. But Coleman brushed off the naysayers, his steely resolve unyielding in the face of doubt.

And then, the storm arrived. In the spring of 2020, as the world reeled from the impact of the COVID-19 pandemic, financial markets were plunged into unprecedented turmoil. Panic gripped investors, and even the most seasoned veterans were left floundering in the tempest.

In late 2022 when the U.S. Federal Reserve began hiking interest rates, the core investment thesis and construct of holdings imploded as high valuation growth stocks came re-rating back to reality.

The reported fund value sank from a peak of $53.76 billion in mid-2021 to a low point of $8.16 billion at the end of 2022.

During 2023, tech came back in favor as shown by the 35% growth in portfolio value to $10.99 billion at the end of Q1. The chart below shows the rise and fall of the fund over the last 10 years.

It is clear that momentum has finally turned around for Tiger and are now moving in the right direction once again.

So what are the most significant positions driving these returns?

Top 5 Holdings

Tiger Global Management’s top five holdings are currently Microsoft Corporation (US:MSFT), Meta Platforms, JD.com, Amazon.com (US:AMZN), and Alphabet (US:GOOGL).

Biggest Increases

During the most recent quarter, several stocks in the hedge fund’s portfolio experienced significant increases.

The fund’s position in Alphabet stood at a market value of $867.6 million after Tiger more than doubled its stake to 8.36 million shares of GOOGL stock. The position grew to a top five portfolio weight allocation of 7.89%, growing by 3.86%.

The holdings in Meta Platforms also saw substantial increases, with the portfolio allocation growing by 2.66% to 14.37% of the total fund with a market value of $1.58 billion. Tiger actually sold 6% of its shares of META stock, keeping a balance of 7.46 million. The growth in position size was notably attributed to strong share price growth.

Tiger initiated a new position in accounting software company, Intuit (US:INTU), with a 1.81% portfolio allocation worth $199.91 million at the end of the quarter.

The fund grew its share count ownership in gaming stock Take-Two Interactive Software (US:TTWO) by 236% to 2.4 million shares during the first quarter. The allocation portfolio allocation increased by 1.69% to 2.60% of the fund with a market value of $286.35 million.

The fund also bought into one of the world’s largest chip makers, Taiwan Semiconductor Manufacturing (US:TSM) holding a 1.34% position worth $147.77 million when the quarter ended.

Other notable increases in the top 10 included; a new 1.27% position in Apple (US:AAPL), a sizeable purchase of shares in Apollo Global Management (US:APO), an increase its stake in Datadog (US:DDOG) and new positions in XP Inc (US:XP) and Lam Research (US:LCRX).

Significant Sales

On the other side, the largest decreases by the fund included JD.com, which stake was cut to 9.61% of the portfolio. Tiger actually increased its share count by 10%, although this was offset by a sharply declining share price.

Tiger cut 38.5% of its holdings in Kanzhun (CN:BZ), along with share price weakness drove a 1.98% allocation decrease to 1.48% of the portfolio by the end of the quarter. The market value of the position reported was $162.19 million.

Shares in data center operator Snowflake (US:SNOW) declined by 27.4% during the quarter, driving most of that stock’s 1.89% portfolio allocation decrease to 2.60% of the fund. The stake’s market value of $286.03 million remains as the Street grapples with slowing growth and an inflated $50 billion market cap for SNOW stock.

The fund sold 9% of its shares in Workday (US:WDAY), reducing its portfolio allocation to $520.05 million or 4.73% of the fund. The position still remains in the top 10 most-significant weights by size.

Almost all of the position in cybersecurity company SentinelOne (US:S) was sold with 99% of shares offloaded during the quarter, leaving a 600,000 share position left by the end.

Other sizeable decreases in the top 10 included the complete sell-down of Match Group (US:MTCH) and Applovin (US:APP) shares, and a reduction of positions in Mastercard (US:MA), Zoominfo Technologies (US:ZI) and Pagaya Technologies (US:PGY).

This article originally appeared on Fintel

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