Tiger Global, the hedge fund backed by Warren Buffett, has announced that it will reduce its investments and sell off a majority of its holdings in a number of tech companies. At its peak, Tiger Global had a portfolio worth over $100 billion. The slashing comes as tech stocks plunge in value amid jitters over Russia’s invasion of Ukraine. Tiger Global has reportedly lost $17bn in the tech sell-off this year, making it one of the largest losses for a hedge fund in history.
This bad run has been fueled by huge bets on tech stocks and a global selloff following Russia’s invasion of Ukraine. The firm has also struggled with slow growth in China and the U.S., two crucial markets for the technology sector. Tiger Global’s recent struggles have prompted the firm to take a more modest approach to its investments. The company’s past performance has been flawless, and the current setback has forced the company to reassess its investment strategy.
Tiger Global’s portfolio has lost about 35 per cent so far in 2022. The fund aims to make a profit by investing in both publicly traded and private-sector companies. However, investors should still remember that investing in China can be risky, especially if the government views capitalism as an excess and wants to curb it.
Tiger Global’s success comes largely from Coleman’s ability to capitalize on depressed valuations in the technology sector in the wake of the dot-com bubble. He spent his time studying the industry, acquired the right investments and took high-conviction bets on some of the most promising technology giants. By the year 2020, Tiger Global had become one of the most profitable hedge funds in history.
Carvana and Snowflake have doubled in price since the end of June, but Tiger Investments has cut its stake almost completely. Snowflake and Sea Ltd have also rebounded since the beginning of June, but Tiger Investments is reducing stakes in those two companies by various percentages. The fund said that it underestimated the impact of surging inflation and was adjusting its investments accordingly.
In addition to reducing its portfolio, the hedge fund has also sold out many smaller positions. It is expected that the firm will return cash to investors. The massive sell-off has left some hedge funds severely damaged, and the losses have increased substantially in recent months.
The hedge fund has cut its stake in Amazon and Alphabet and sold a stake in fintech company Upstart. The move is seen as a defensive measure. However, investors should remain cautious despite the recent sell-offs. Assuming that the market continues to fall, Tiger Global may be facing a challenging time.