Tiger Global got a foot in the door early on Alibaba (BABA) , investing $200 million in the e-commerce company before its IPO. In 2014, its investment in VipShop (VIPS) proved one of its top picks of the year, with the stock gaining more than 120% for the year through October alone.
In its first-quarter letter to investors, reported by ValueWalk, Tiger Global outlined its enthusiasm surrounding the Chinese tech market, especially in the realm of e-commerce. "Between 2014 and 2022, we expect Chinese e-commerce penetration to roughly double from 20% to 40%, implying an addressable market size of approximately $1.3 trillion in 2022," the firm wrote.
A management shakeup has put Tiger Global in the headlines recently, as firm founder Chase Coleman told investors in a letter Monday that two of its partners, Feroz Dewan and Caleb Watts, plan to leave in June. He also said Tiger would be combining its two long-only funds, merging its Internet Opportunities fund, launched at the start of the year, with its Long Opportunities fund.
Changes and reorganization aside, Tiger Global has an investment portfolio worth noting -- perhaps especially when it comes to the Chinese tech companies it's betting on. Here's a look at five of them.
Tiger Global likes JD.com (JD), which just edged out MasterCard (MA) as its top stake in the first quarter. The firm increased its stake in China's second-largest e-commerce business from 5.1 million shares at the end of the fourth quarter of 2014 to 20.9 million shares at the end of the first quarter. As of March 31, the position is valued at $614.7 million.
Tiger dedicated a significant portion of its first-quarter letter to JD.com, which it believes is positioned to "retail leapfrogging" in emerging markets. "While the stock has performed well and expectations have risen, we continue to believe that JD is attractively valued over the long term and well-positioned within a large and growing e-commerce market," Tiger wrote. "As with other rapidly growing retail businesses, we expect JD's incremental margins to increase with time as the company leverages fixed costs, resulting in an attractive net margins once the company reaches scale."
Tiger Global isn't the only organization with an interest in JD.com. Bloomberg reports that hedge funds hold 44% of the company's American depositary shares. Lone Pine Capital, run by fellow tiger cub Steve Mandel, has a $1.1 billion stake in the company as of the end of the first quarter.