A new revelation shows once again how badly Tiger’s “pray and spray” fund is performing

Tiger Global famously fueled the pandemic-era venture capital boom, investing heavily in a wide variety of startups, setting up bidding wars for even the most unproven startups that led to the highest valuations. In 2021 alone, the hedge fund provided support 315 startupsAccording to PitchBook data.

And much of the VC industry not happy about that even on time. Towards the end of 2021, the New York firm convinced its investors to commit $12.7 billion to its fifteenth venture capital fund (PIP 15), and then proceeded to pour most of that capital into more startups over the next few months. By May 2022, most of the money in this fund was already fully invested, TechCrunch reported on this.

The firm’s rapid investment strategy backfired. When the US Fed began to rapidly raise interest rates in 2022, money became tighter and startup valuations fell significantly. And as 2024 closes, the impact of the Tiger influence it is still felt because startups are still struggling By not matching the 2021 assessments.

And here’s the thing: a recent statement from one of Tiger’s investors shows that Tiger Global’s fifteenth fund had a particularly poor investment performance, while many other funds at the time had average returns.

As of June 30, 2024, the paper losses on Tiger Global PIP 15 are more than 15%, according to a recently released report. California State Teachers Retirement System report (CalSTRS), one of Tiger’s investors. Such sharp losses put the fund in the bottom 10 percent of all venture capital raised in 2021, according to the latest data. PitchBook Benchmarks.

The firm shed many of its investments at peak valuations, including email company Superhuman by 45%, search engine DuckDuckGo by 72% and NFT marketplace OpenSea by 94%. Bloomberg reported on this last year.

Tiger Global and CalSTRS declined to comment.

It’s true that a VC fund typically takes 10 years to lock in its income through exits or other financial sales, not just paper. Thus, it is possible that some of these companies will surpass their 2021 highs.

However, other 2021 vintage funds in the CalSTRS portfolio are showing marked improvement. For example, Valor Equity Partners’ fifth stock (a measure known as the internal rate of return) has a positive yield of 15.7%, according to the report. Meanwhile, 2021 funds from OakHC/FT, IVP and GGV (rebranded this year) Outstanding Equity) yielded 8.7%, 4.1% and 2.8% respectively.

Although many large venture investors including Andreessen Horowitz, General catalystand Little PerkinsTiger Global, which managed to raise significant funds this year, has scaled back its private-market ambitions in part because it has not been able to raise as much fresh capital as it originally intended. In particular, in October 2022, Tiger Global intends to raise $6 billion for its sixteenth private market fund. The fund’s target was later revised to $5 billion. The Wall Street Journal reported on this.

But the New York firm failed to raise even half of its new target. After nearly 18 months of fundraising, PIP 16 closed earlier this year with only $2.2 billion in commitments. Bloomberg reported on this. This is still a large fund. But it does not compare with his previous ambitions.

Still, Tiger Global still has enough of a war chest to invest in startups. According to PitchBook data, the company has participated in 24 VC deals this year, including Waymo, OpenAI, Scale AI and Wiz.

Nearly three years have passed since the height of Tiger Global’s investment frenzy, but it will take time for the firm to shake off its reputation as an investor that made many wrong bets during the pandemic.

Some of the people responsible for that era’s rapid-fire VC investment strategy are no longer with the firm. John Curtius, one of Tiger Global’s leading VC investors, He left the company at the end of 2022 Forming his own firm, Cedar Investment Management. According to reports, the company wanted to raise $1 billion. It is not yet known whether the fund has attracted or started investing. VC Head of Tiger Global Scott Shleifer also made the switch to a consultant role at the beginning of the year.