Chase Coleman’s Tiger Global LLC is raising $1.25 billion for its sixth private-equity fund and has used some of the money to increase its stake in Facebook Inc., according to two people briefed on the plan.
Tiger Global, based in New York, has $1 billion in commitments and plans to line up an additional $250 million by next month, said the people, who asked not to be identified because the information is private. Coleman, 35, has steered about $80 million from the new pool into Facebook, whose more than 600 million users make it the top social-networking site.
The firm raised more than $2.5 billion for its previous private-equity partnerships, buying stakes in companies including Facebook, LinkedIn Corp., a professional networking site, and Youku.com, China’s largest online-video provider, the people said. Its $1.1 billion fifth fund has returned an average of 15 percent a year since its start in 2008, according to a September investor document reviewed by Bloomberg News.
“You’d have to have done a very good job in your previous funds in order to launch your sixth fund,” said Don Steinbrugge, managing partner of Agecroft Partners, a Richmond, Virginia-based consulting firm that advises investors and hedge funds.
Tiger Global’s fifth fund spent $164 million to build a 1 percent stake in Facebook from December 2009 to June 2010, when the firm valued the site at $24 billion, the people said. Facebook, based in Palo Alto, California, is now valued at $50 billion after raising $1.5 billion from investors including Goldman Sachs Group Inc.
Coleman declined to comment. He started his firm as a hedge fund in 2001, one of more than 30 former employees of Julian Robertson’s Tiger Management LLC to go out on their own. Known as Tiger Cubs, the Robertson alumni include Stephen Mandel of Lone Pine Capital LLC in Greenwich, Connecticut, and Lee Ainslie, the New York-based founder of Maverick Capital Ltd.
Coleman was a technology analyst for Tiger Management from 1997 until 2000, when Robertson closed his $6 billion fund to outside investors. Tiger Global, which was seeded by Robertson, oversees $4.4 billion in hedge funds. Its main Tiger Global Master hedge fund has returned an average of 21 percent annually since inception, according to the investor document.
The firm raised $75.8 million for its first private-equity fund in 2003. Youku.com, based in Beijing, was among its initial investments, the people with knowledge of the firm said. In December, Youku posted the biggest first-day gain for a U.S. initial public offering in five years. The stock has more than doubled to about $32 from its IPO price of $12.80.
DangDang, Digital Sky
Tiger Global has also invested in Beijing-based E-Commerce China DangDang Inc., the country’s biggest Internet book retailer, which almost doubled in its U.S. initial public offering last month, the people said. It’s also an investor in Russia’s Digital Sky Technologies, which this month added $50 million to a $200 million Facebook stake it bought in May 2009. Tiger Global put $31.5 million into Mountain View, California-based LinkedIn from December 2009 to June 2010.
Coleman has also invested in Internet companies in Brazil and Mexico, according to the investor document. The firm’s best returns were in its first two funds, which gained 64 percent and 55 percent through September of last year, the document shows.