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Tiger Global has raised $2.2bn for its latest venture capital fund, roughly a third of the $6bn target it touted to investors when it first announced the fund in 2022.
Tiger was one of the most prolific investors in private technology start-ups during a venture boom that peaked in 2021. The New York-based firm raised a $12.7bn fund in 2021 and has built stakes in TikTok parent company ByteDance, fast-fashion company Shein and payments company Stripe.
It started raising for its 16th fund in October 2022 and had received commitments of about $2bn by the middle of last year. Tiger closed the fund last week with total commitments of $2.2bn, according to a person with knowledge of the deal — suggesting it received further commitments of just $200mn in the intervening nine months.
The slow pace of fundraising underscores how a turnaround in private markets has damped the appetite of institutional investors for allocating cash to risky venture capital investments in recent years.
Venture funding has fallen precipitously since the start of 2022. Rising interest rates have hit the valuations of private start-ups, forcing Silicon Valley venture capital firms to shift their focus from raising ever-larger funds to instead ensuring the survival of companies in their portfolios.
“The market has completely changed in that time [since 2021],” said a person with knowledge of Tiger’s fundraising. “It’s a different time, and different business. The focus is not ‘bigger is better’, it’s on performance.”
The last time Tiger raised a similarly sized fund was its 10th vehicle in 2015, which totalled $2.5bn. Since then the firm has raised a series of larger funds.
Scott Shleifer, the head of Tiger’s $30bn-plus private equity business who was instrumental in the firm’s growth, announced late last year he would step down from his role at the hedge fund. Shleifer was one of Tiger’s first hires and marshalled investments into booming Chinese technology companies, including ecommerce groups such as JD.com and Ctrip.com.
Shleifer’s departure was one reason that Tiger’s new fund did not close sooner, according to the person familiar with the process. “The fund hasn’t been marketed to investors in six months. [The long deadline] was to give people time to digest the Scott news,” they said.
In an annual letter to investors, Tiger recently expressed optimism that its largest private investments, such as Stripe, software company Databricks and ByteDance, were “performing well and should have the opportunity to go public once markets are more accommodating.”
It also told investors that it intended to “remain disciplined” in its investment approach, “waiting for ‘fat pitches’ to swing hard”.
Tiger declined to comment on the close of the fund, which was first reported by Bloomberg.
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