Charles Payson Coleman III, "Chase," is a Tiger Cub who got his bearings at Julian Robertson's Tiger Management. At 36, he is one of the younger billionaire hedge fund managers and runs Tiger Global, a long/short equity fund with ~$6 billion in AUM, which is co-managed by Feroz Dewan. Coleman's fund was seeded with $25 million from Robertson in 2000. At such a young age, you might ask how Coleman got into Robertson's good graces in the first place. Well, it turns out that Coleman grew up with Robertson's son Spencer.
That being said, Coleman has been very successful in his own right. Last year, Tiger Global was the top performing hedge fund, returning 45%. Tiger Global tends to be weighted heavily in the technology sector, no surprise since Coleman was a tech analyst at Tiger Management for three years. And with the launch of a private equity arm in January 2011, the firm has invested in the likes of Zynga (ZNGA), Facebook (FB), and LinkedIn (LNKD). A fellow hedge-fund executive notes that Coleman "invests in these things when they're already at a couple hundred million in revenue. He's not a VC guy, but he helps create valuations of these companies at the pre-IPO stage."
As a descendant of Peter Stuyvesant, the last Dutch Director-General of the colony of New Netherland which eventually became New York as we know it today, Coleman is of "old money." He attended Deerfield Academy, the elite prep school in Massachusetts, and graduated from Williams College in 1997 with a degree in Spanish and Economics.
Here are billionaire Chase Coleman's top 10 holdings at the end of March:
YANDEX N V
PRICELINE COM INC
LIBERTY GLOBAL INC
LIBERTY GLOBAL INC
LIVE NATION ENTERTAINMENT INC
Coleman's new picks for the quarter include Deckers Outdoor (DECK), the Energy Sector ETF (XLE), Frontier Communications (FTR), and Ancestry.com (ACOM). He decreased positions in Yandex and Apple by about a quarter and in Priceline by more than a third, likely scaling back positions to take large gains. YNDX remains a strong player in the Russian search and eCommerce market. It has 60% market share in overall Russian search and 45% market share in online advertising compared to number two player Google with 26.2% market share, and Mail.ru (MLRUY.PK) with 8.2% market share. We think the Russian online search market is very attractive, and prefer YNDX over GOOG and MLRUY as a way to play the double digit secular growth.
Positions in Baidu (BIDU) and Viacom (VIAB) were scaled back significantly as well. BIDU seems to be on-track to hit management guidance and are not as dependent on macro events as the company was in 2008. The majority of BIDU's ads are performance-based paid search, which has proven more resilient to economic downturns than those bought by brands. BIDU trades at 19.2x forward P/E versus GOOG at 11.5x and YNDX 16.7x. So while YNDX is our preferred method of playing Russian search, GOOG still dominates the US and has more potential in mobile.
Like Robertson's Tiger Management fund, Coleman's portfolio is also tech-heavy with 44% of his portfolio in Technology, 26% in Consumer Services, and 13% in Financials. Chase Coleman and Julian Robertson have large positions in Apple and MasterCard.
Apple doesn't get any respect for its growth potential and trades at single digit forward PE ratios excluding cash. The market literally expects Apple to shrink over the next few years. Billionaire David Einhorn is one of the most outspoken hedge fund managers about Apple. Apple is the top position in his portfolio. Apple is also the most popular stock among hedge funds (see the 10 most popular stocks). Einhorn thinks that the market is wrong about Apple and the stock has the potential to exceed $1 trillion in market cap.
Hedgies usually hold MasterCard and Visa together in their portfolios. These stocks are in a great growth industry. Electronic transactions are still a small percentage of total transactions (around 15% market share globally). Visa and MasterCard will benefit significantly as the share of electronic transactions increase over the next decade.
Disclosure: I am long AAPL.