Alibaba Group Holding Ltd (BABA), VipShop (VIPS): Tiger Global 2014 Q4 Investor Letter Highlights

Tiger Global, founded by billionaire Chase Coleman, is one of the most secretive hedge funds out there. Coleman shies away from cameras and has repeatedly declined our interview requests in the past. Tiger Global is one of the most successful hedge funds that still deliver strong results despite its size. Last year wasn’t an exception. Tiger Global’s onshore hedge fund, managed by Chase Coleman and Feroz Dewan, returned 16.9% in 2014 despite losing 3.7% during the third quarter. The most impressive figure is their 22.2% annualized return since the fund’s inception in March 2001. S&P 500 Index and MSCI World Index returned 6% annually during the same period. Tiger Global’s stock picks are predominantly  technology stocks, yet Tiger Global outperformed the NASDAQ Composite by also 15 percentage points per year since 2001.

According to Tiger Global’s 2014 Q4 investor letter seen by Insider Monkey the long/short fund was able to generate alpha both on the short and the long sides of its portfolio. “The Hedge Fund’s longs increased 19% and the shortsgenerated modestly positive returns excluding borrow costs. While the longs were responsible for the bulk of profit dollars for the year, the shorts outperformed the longs from an alpha perspective,” the letter read.

Tiger Global Investment Team highlighted Alibaba Group Holding Ltd (NYSE:BABA), FleetCor Technologies, Inc. (NYSE:FLT) and Vipshop Holdings Ltd – ADR (NYSE:VIPS) as big contributors on the long side of the portfolio. Here is what the letter said:

“On the long side, many of our largest themes in both the Hedge Fund and TGLO contributed to performance in 2014, including consumer Internet, pay TV & content, and payment processing. The most profitable position in each theme, respectively, was Vipshop, a leading online discount apparel retailer in China; Naspers, a South Africa-based media company that owns a unique portfolio of Internet assets; and Fleetcor, a leading provider of fuel cards to commercial fleet operators. The Hedge Fund also benefited from Alibaba Group’s positive performance in its first three months of trading following the company’s IPO on the NYSE in September 2014, primarily as a result of shares acquired when the company was private.”