Tiger Global Management LLC is a New York-based investment firm founded by Chase Coleman in 2001 with $25 million in seed money from legendary investor Julian Robertson. The firm’s Tiger Global hedge fund has around $6 billion in assets under management as of the beginning of 2015. Billionaire Chase Coleman has a net worth of almost $2.1 billion, which makes him one of the richest self-made billionaires in the world according to Forbes, and the 318th richest person in the U.S. According to its latest 13F filing, Tiger Global Management’s public equity portfolio is valued at $9.12 billion and consists of 54 positions. The fund’s portfolio has a strong commitment to the consumer discretionary and information technology sectors, which collectively represent 79% of the total portfolio value. Tiger Global Management’s largest positions are represented by JD.Com Inc (ADR) (NASDAQ:JD), Mastercard Inc (NYSE:MA), Twenty-First Century Fox Inc (NASDAQ:FOXA) and TransDigm Group Incorporated (NYSE:TDG).
We pay attention to hedge funds and prominent investors because historically, a select group of these funds’ top stock picks (their small-cap picks) delivered superior risk-adjusted returns between the years 1999 and 2012. Our research has shown that imitating a portfolio of the 15 most popular small-cap picks among these funds delivered an alpha of around 80 basis points per month and beat the market by nearly a percentage point per month on average, while the 50 most popular stocks among hedge funds overall delivered a monthly alpha of just six basis points per month and underperformed the market. This small-cap strategy has managed to post gains of over 139% since we started following it in real-time, vs. a less than 60% gain for the S&P 500 ETF (SPY) (read more details here).
Let’s take a closer look at Chase Coleman’s top picks. On the first spot is JD.Com Inc (ADR) (NASDAQ:JD), in which the investor almost tripled its stake to 20.92 million shares valued at $614.67 million from 5.11 million shares. This big move increased the exposure of the holding in the hedge fund’s portfolio to 6.74% from 1.40% at the end of 2014. In terms of transaction volume, JD.Com Inc (ADR) (NASDAQ:JD) is the biggest online direct sales company in China, and sports a $46.7 billion market cap. Recently, the company announced a $171 million investment to acquire a 10% stake in Kingdee International Software Group Company Limited, a software products and cloud services provider. Shares of JD.Com have gained more than 60% over the past year and 47% year-to-date.
The second largest position in Tiger Global’s public equity portfolio at the end of the first quarter of 2015 was Mastercard Inc (NYSE:MA), one of its long-term holdings. In the global payments industry and technology company, Chase Coleman disclosed holding 7.11 million shares, a slight decrease compared to the previous quarter, with the position valued at $614.33 million. As reported for the first quarter of 2015, Mastercard Inc (NYSE:MA)’s net income has increased by 17.24% to $1.02 billion, along with $0.89 diluted earnings per share. During the January-March period, the company repurchased a total of almost 11.0 million shares at an average price of $86.32 per share of Class A common stock. The largest shareholders of Mastercard Inc (NYSE:MA) among the funds from our database are Stephen Mandel‘s Lone Pine Capital owning 12.97 million shares, followed by Tom Russo’s Gardner Russo & Gardner and Andreas Halvorsen’s Viking Global with 10.02 million shares and 8.26 million shares, respectively.
Next in line is Twenty-First Century Fox Inc (NASDAQ:FOXA), one of Coleman’s picks from the consumer discretionary sector. Tiger Global Management disclosed a $568.69 million position in the company that contains 16.80 million shares, unchanged from the previous quarter. Twenty-First Century Fox Inc (NASDAQ:FOXA), a $70.3 billion leading entertainment and media conglomerate, reported net income of $1.04 million or $0.47 diluted earnings per share for its fiscal third quarter of 2015. Donald Yacktman’s Yacktman Asset Management and Jeffrey Ubben’s ValueAct Capital are also prominent investors with large positions in Twenty-First Century Fox Inc (NASDAQ:FOXA).
Finally, the fourth-largest position in terms of value is represented by TransDigm Group Incorporated (NYSE:TDG), in which Tiger Global Management holds 2.57 million shares worth $561.81 million. TransDigm Group Incorporated (NYSE:TDG) is a leading global designer, producer and supplier of highly engineered aircraft components, whose stock gained 16.55% year-to-date and is up by 22.61% over the last 52 weeks. Recently, the company announced that it completed the acquisition of Pexco LLC’s assets for nearly $496 million in cash. Also during the quarter, TransDigm Group Incorporated (NYSE:TDG) acquired the aerospace division of Franke Aquarotter for almost $75 million in cash, as well as Telair Cargo Group for $725 million in cash, the latter being a leader in on-board cargo loading, handling and restraint systems. TransDigm posted fiscal second quarter 2015 net income of $110.89 million, a 22.73% increase year-over-year. Other investors in TransDigm Group Incorporated (NYSE:TDG) are Stephen Mandel’s Lone Pine Capital holding 2.21 million shares as well as Pennant Capital Management managed by Alan Fournier, which owns 1.78 million shares as of the end of first quarter of 2015.
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