Bloomberg’s article Big Stock-Picking Hedge Funds Suffer Brutal Reversal in 2022’s Market Tumult comments on the unusual trends in the 2022 stock market. I believe this information is important because it provides a nuanced and comprehensive outlook into the world of modern money and how easily it can be disturbed.
The largest hedge funds that sprang from Julian Robertson’s Tiger Management have consistently outperformed the market. However, in 2022, they are losing money on both of their favorite trades: unicorns and technology giants. The so-called Tiger cubs, Chase Coleman, Philippe Laffont, and Andreas Halvorsen, all rode long positions in the IT sector as values rose, only to suffer as opinion turned amid tumultuous markets.
According to a letter to clients sent last week, Tiger Global’s managers adjusted valuations down for the fund’s private investments to account for pressure on their public-market peers. ByteDance, Stripe, Checkout, and Databricks are among the private companies owned by the fund. It’s unclear what the write-downs signify for Tiger Global’s venture division, which had $65 billion in assets at the end of the year. Karthik Sarma’s SRS Investment Management was one Tiger offshoot that defied the trend. The $8 billion company concluded the quarter with a 9.6% gain, thanks in part to a big investment on Avis Budget Group Inc (Parmar and Burton). Despite the volatile atmosphere, Sarma spent five years with Tiger Global before launching his own firm.
Some investors believe the mega funds missed the market rotation caused by inflation fears and a European conflict because of their size, which hindered them from being flexible. As a result, many people found themselves on the wrong side of a variety of deals. This contradiction once again underlines the relevancy of this article to the present day, where among the war happening in Europe and the sharp rise in inflation, it is essential for people to get a basic understanding of the stock market.
Parmar, Hema, and Burton, Katherine. “Big Stock-Picking Hedge Funds Suffer Brutal Reversal In 2022’S Market Tumult”. Bloomberg.Com, Web.