At 42 years old, Chase Coleman is possibly the youngest of the big-league hedge fund managers. In 2011, when he was 36, his Tiger Global long/short equity fund returned over 45%. That made it the most profitable hedge fund in the world according to Bloomberg. His other claim to fame is that he was an early investor in Facebook, an investment that no doubt contributed to his $2.2 billion net worth.
Coleman’s career in investments started in 1997 at Julian Robertson’s Tiger Management. Robertson was one of the top hedge fund managers of the eighties and nineties and is credited with the growth in popularity of the hedge fund business model.
When Robertson closed his fund to outside investment in 2000, he seeded around 30 young hedge fund managers with $25 million each. Chase Coleman was one of these so called ‘Tiger Cubs’, and went on to become one of the most successful. Much of his success can be attributed to his focus on internet related investments, his willingness to invest in unlisted companies and his aggressive position sizing.
Some of Tiger’s success can also be attributed to partner Feroz Dewan who left the firm in 2015. Dewan has also been credited with spotting internet related investments long before they went public.
Follow The Money
Coleman’s fund has evolved into a hybrid between a hedge fund and a private equity fund. He invests in relatively early stage start-ups, as well as private companies that are on track to go public. He’s also very comfortable investing in large tech stocks like Alphabet Inc (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN).
He has a knack for getting into companies and sectors just before the rest of the investment community, and then riding the momentum for as long as it lasts.
Because he invests in high growth companies, his approach has less to do with valuation, and more to do with understanding trends in technology and in market psychology. Most of the companies he has invested in have also gone on to be successful and profitable companies.
Coleman often invests aggressively and in 2015, three stocks accounted for 60% of his fund. This level of concentration has worked well most of the time, but can also hurt performance when the bets don’t work. In the first quarter of 2016 his fund fell 22%, dragged down by sizable positions in Netflix and Amazon.
Coleman’s fund also takes short positions. Over the last five years many of his is short positions have been in European equities, which he rightly expected to underperform U.S. and Asian equities.
Looking at the stocks he has held positions in over the years, its clear that he invests wherever the action is. More recently he has started taking larger positions in China’s internet stocks as illustrated in the portfolio review below.
Tiger Global Management’s Latest Form 13F Filing
On November 14th, 2017, Chase Coleman’s firm Tiger Global Management filed their quarterly Form 13F regulatory filing. I reviewed the 13F filing to review holdings in Tiger Global Management’s large portfolio.
Tiger Global Management’s stock portfolio totals nearly $14.1 billion according to the latest filing. The list value of stock holdings is up 22.0% when compared to the last quarter. As a benchmark, the S&P 500 was up 3.9% over the same period.
Quarter-over-quarter turnover (QoQ Turnover) measures the level of trading activity in a portfolio. Tiger Global Management’s QoQ Turnover for the latest quarter was 24.8%, so the firm appears to trade a significant percent of its portfolio each quarter.
Tiger Global Management’s Largest Holdings
The Ideas section of finbox.io tracks top investors and trending investment themes. You can get the latest data on the holdings discussed below at the Chase Coleman page. The following table summarizes his firm’s largest holdings reported in the last filing:
|Ticker||Name||Holding ($mil)||% Of Portfolio|
|PCLN||PRICELINE GRP INC||$2,015.2||14.3%|
|JD||JD COM INC||$1,875.6||13.3%|
|AMZN||AMAZON COM INC||$1,478.3||10.5%|
|APO||APOLLO GLOBAL MG…||$1,024.9||7.3%|
|DESP||DESPEGAR COM CORP||$966.5||6.9%|
|TDG||TRANSDIGM GROUP INC||$833.4||5.9%|
|BABA||ALIBABA GROUP HL…||$783.5||5.6%|
The seven positions above represent 63.8% of the hedge fund’s total portfolio.
Tiger Global Management’s 7 Largest Purchases
I also used finbox.io to find Tiger Global Management’s largest buys last quarter. Here’s the list of the biggest stock purchases determined by comparing the last two filings:
|Ticker||Name||Purchased ($mil)||% Of Portfolio|
|DESP||DESPEGAR COM CORP||$927.6||6.9%|
|AMZN||AMAZON COM INC||$283.4||10.5%|
|TAL||TAL ED GROUP||$276.8||2.4%|
|JD||JD COM INC||$205.7||13.3%|
Not surprisingly, the majority of Tiger Global Management’s holdings and recent purchases have been in the consumer internet business.
Tiger Global Management’s 7 Biggest Sells
Here’s the list of biggest position reductions determined by comparing the last two filings:
|Ticker||Name||Sold ($mil)||% Of Portfolio|
|TDG||TRANSDIGM GROUP INC||$189.2||5.9%|
|AMT||AMERICAN TOWER C…||$80.1||0.7%|
|ONDK||ON DECK CAP INC||$5.3||0.0%|
Tiger Global Management’s Most Undervalued Holdings
To determine which stocks are trading below their intrinsic value, aka “fair value” I used the finbox.io Fair Value estimates. I also wanted to blend in some indication of which stocks might be ready to make a move up soon because they’re popular with Wall Street analysts.
I calculated an average using the finbox.io fair value upside and analyst upside to create a blended upside which I then used to rank the most undervalued holdings.
Here are the top 7 stocks based on my calculations:
|Ticker||Name||Upside (finbox.io)||Upside (Analyst Target)||Blend Upside|
|TAL||TAL ED GROUP||34.0%||19.3%||26.6%|
|JD||JD COM INC||25.7%||21.1%||23.4%|
|ZTO||ZTO EXPRESS CAYM…||10.1%||27.1%||18.6%|
|BABA||ALIBABA GROUP HL…||7.1%||20.3%||13.7%|
|EDU||NEW ORIENTAL ED …||14.0%||13.0%||13.5%|
Tiger Global Management’s Recent Price Pull-Back Stocks
To find stocks in his portfolio that may be unpopular at the moment and trading at cheap valuations, I ranked his holdings by price pullbacks. The ranking table below lists the stocks in Tiger Global Management’s portfolio by stock price performance over the last 30 days.
|Ticker||Name||Price 1-mo Ago||Current Price||% Change 1-mo|
|ZTO||ZTO EXPRESS CAYM…||$16.83||$14.70||-12.7%|
|BABA||ALIBABA GROUP HL…||$185.13||$173.37||-6.4%|
Managers with more than $100 million in qualifying assets under management are required to disclose their holdings to the SEC each quarter via 13F filings. Qualifying assets include long positions in U.S. equities and ADRs, call/put options, and convertible debt securities. Shorts, cash positions, foreign investments and other assets are not included. It is important to note that these filings are due 45 days after the quarter end date. Therefore, Tiger Global Management’s holdings above represent positions held as of September 30th and not necessarily reflective of the fund’s current stock holdings.
However, most can agree that with thousands of stocks traded on U.S. exchanges, doing thorough research on each one is nearly impossible for smaller investors. Leveraging the resources of the largest hedge funds on Wall Street can be a powerful way to narrow down the list.
As of this writing, I did not hold a position in any of the aforementioned securities and this is not a buy or sell recommendation on any security mentioned.