Hedge Fund Giant Losing $40 Million a Day

The bloodletting continues at hedge fund giant Tiger Global Management. The fund lost approximately $40 million a day in October.


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From a new report in the Financial Times:

Losses at Tiger Global Management continued to mount in October after the New York-based hedge fund was buffeted by the whipsawing value of technology stocks in the US and a sell-off in China.

The firm’s flagship hedge fund lost 5.4 per cent in October, taking losses this year to a new low of 54.7 per cent, according to a person with knowledge of the figures.

Tiger managed about $17 billion in assets at midyear. With October’s 21 trading days, that 5% loss amounts to roughly $40 million per day or over $6,000,000 per hour.

The NASDAQ index of technology stocks rose slightly last month. This underscores Tiger’s abysmal stock picking.

Tiger’s losses may be even worse than they appear.

Its $40 billion portfolio of private tech startups dwarfs its public holdings. Tiger values those companies itself.

Has Tiger really taken markdowns commensurate with its huge losses in public stocks?

I doubt it. Why make a bad situation look even worse?

The end game for Tiger is liquidation.

Their fund would have to more than double just to get back to its high point. Only then could the partners start collecting that juicy 20% performance fee again.

That fat fee is the biggest prize in hedgefundland. You can bet these traders won’t want to give it up.

If Tiger liquidates and the partners start a new fund, they can start charging performance fees on day one. The slate is clean!

If I were an investor in Tiger, I’d be dumping my shares. These losses are huge and show no signs of improving.

Why pay Tiger’s fees when you can park your money in a low fee index fund instead?

What do you think the future holds for Tiger? Leave a comment at the bottom and let me know!

More on markets:

Tiger Global Down 52% — Losses Over $18 Billion

Hedge Fund Manager’s Arrest Shows How Market Manipulation Works

VC’s Sour on China — Funding Down 44%

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Photo: Tiger Global CEO Chase Coleman

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