Well, one of them paid $132m! for a house last year

https://www.forbes.com/sites/amydobson/2021/02/12/one-of-the...

Millions? You mean billions.

You know your incentive structure is wrong (and people will never learn) when hedge funds don't actually hedge (their long/short fund fell the same as their long only fund), instead essentially gambling your money for you, taking 2 & 20 off the top for their trouble, while you eat 100% of the losses.

Both these can be true at the same time

- A large percentage of Tiger Global is pension fund money

- Pension funds have an extremely small % of their portfolio in Tiger or other high risk high tech investments vehicles.

Because pension funds are so big.

I’m sure LPs are very happy with 25% IRR.

But this is disingenuous (at best) marketing speak - the 25% IRR is blended over the entire fund.

LPs enter at different times into Fund 1, 2, 3, up to Fund 15 now. As an LP, your specific fund that you entered primarily determines your returns (depends on structure, there can be some blending). If Fund 13 invested into a bunch of failing businesses that group gets hurt massively.

So while 25% IRR is very fantastic, that's not the full story. There are specific Fund numbers that are getting great returns and others absolutely bleeding.

You would normally break out the IRR per individual fund for performance analysis. Blending it will hide variance (which usually is tremendous and may cause a single well performing investment in fund 1 to optically lift up everything else when in fact it doesn't matter at all except to those LPs that invested in fund 1).

IRR doesn't mean a thing though, money returned over the run-time of a fund is a much better metric to figure out if LPs are going to be happy or not. A high IRR can still result in very little money returned because it all depends on whether or not the valuation metrics used to compute the IRR were accurate and whether the value created according to the IRR can be captured or not.

Is your point that head fund managers only deserve to get paid if they are successful? Or are you trying to insinuate Tiger Global's managers were negligent/reckless with the money?

I think they're point out that when you're making millions of dollars a year you have an incentive to get a little reckless to try to eek out better and better returns. Sure you want to keep the gravy train moving, but if you're worth $50 million, and you the have the choice between playing it safe for $2 million, or rolling the dice and maybe making another $50... you're probably not going to be dissuaded because it's a pension fund's money.

You've already got yours so what's the worst that can happen?

Do you have actual reason to believe Tiger Global did this, or this all baseless speculation?

“Show me the incentive and I will show you the outcome.”

— Charlie Munger

He has evidence of excessive risk taking (Tiger Global's returns), and an incentive structure that makes it logical for them to behave this way. That alone isn't "baseless." Also, it's Tiger Global, not Tiger Direct.

> He has evidence of excessive risk taking (Tiger Global's returns)

Loss does not prove excessive risk, even excessive loss. There is always a risk of loss in any investment.

Whether this was 99% going to happen, or Tiger Direct was very safe and this is a 1/10000 case of bad luck cannot be determined by looking at the amount lost.

> He has evidence of excessive risk taking (Tiger Global's returns), and an incentive structure

How are Tiger Global’s incentives different from any other VC? Even the majority of hedge funds have a 2+20 structure with similar incentives.

Tiger Direct is a retailer. I think you mean Tiger Global Management.

I did, my bad. A lot of your comments are marked dead (I vouched for this one), you might be shadowbanned.

>>are you trying to insinuate Tiger Global's managers were negligent/reckless with the money?

From the article.

=>Tiger Global’s hedge fund assets have been so hard hit that the outfit has in four months erased about two-thirds of its gains since its launch in 2001.

=> that’s just twice the return they would have received by investing in the S&P 500 over the same 21-year period

Not sure how to interpret these numbers.

I interpret that as: they made 6x returns as the S&P, but then had a bad quarter and are down to 2x returns.

Still sounds pretty good.

I don't think you can go -2x by pressing some wrong button on they keyboard.

Its more like they've been making mistakes over years which seem to have culminated in one event this quarter.