Chase Coleman's Tiger Global tells investors that SARS created 'an incredible backdrop for prospective returns' and reveals why it likes TikTok's parent DanceByte even more during the coronavirus pandemic

Business Insider/ Mike Nudelman

• Chase Coleman's Tiger Global, the secretive $36 billion fund manager, told investors in its latest private fund that the SARS breakout in China in 2003 created an "incredible backdrop for prospective returns."
• In the letter, the manager disclosed the biggest holdings in its private funds include Flipkart, Juul, TikTok parent ByteDance, DiDi, and Stripe.
• Tiger Global said it warned its portfolio companies that it will be harder to raise money due to the pandemic.
• "Based on our discussions, we have already seen negative net revisions to the 2020 revenue forecasts" for portfolio companies, the firm wrote.
• Visit Business Insider's homepage for more stories.

Billionaire Chase Coleman's Tiger Global begins a recent letter to investors in his firm's private equity fund by saying the $36 billion fund manager is "deeply sympathetic to the human toll this virus is taking."

It ends the letter, dated March 23, by reminding investors that some of the firm's "most impactful" private investments were boosted by the 2008 housing crisis - such as Facebook, Flipkart, and JD - and that the SARS outbreak in 2003 created "an incredible backdrop for prospective returns."

While "no one knows how long coronavirus will affect our lives or the impact it will have on the economy," the firm is identifying winners and losers.

"Many publicly traded and privately held companies, including some [portfolio companies], are seeing their businesses negatively impacted in the short term. Some businesses, particularly online retailers, digital content platforms, and online education providers, appear to be relative beneficiaries," the firm wrote. Tiger Global declined to comment.

Currently, the firm has $1.7 billion in software-as-a-service companies, the letter states, naming unicorn Toast as a portfolio company. Tiger Global also has high praise for TikTok's parent company ByteDance.

"Our research suggests that ByteDance will represent 19% of China's online advertising market in 2020, up from roughly 4% in 2017. The company has expanded globally and has nearly 300 million daily users outside of China," the manager wrote. Some of the firm's other large holdings include Juul, DiDi, Stripe, and Flipkart.

The letter was sent to investors roughly two months after the firm closed its 12th private fund, at $3.75 billion. The letter states that the fund was oversubscribed and that more than 90% of the assets come from existing investors.

The secretive fund manager, which originally invested in just public technology companies before launching its first iteration of a private fund in 2003, said it has distributed more than $4 billion since the beginning of 2019 thanks to pre-IPO positions in companies in like Spotify, Peloton, Uber, and more.

As the pandemic progresses, Tiger Global has spoken with its portfolio companies and has "already seen negative net revisions to the 2020 revenue forecasts for the [private investment] portfolio in aggregate."

"As always, we have been encouraging our management teams to make disciplined choices about where and how they invest and to expect that it will be more difficult to raise capital in the future."

Tiger Global, of course, is not the only investment manager looking for opportunities as economies stall due to the pandemic.

Maverick Capital, run by fellow Tiger Cub and billionaire Lee Ainslie, told investors he was hoping to take advantage of the volatility in the marketplace at the beginning of March, while distressed investors like Marc Lasry have been waiting for the market to fall off so more opportunities will appear.

Tiger Global and Maverick though were not immune to the losses many suffered in March, when equity markets dropped rapidly: The firms' hedge funds both fell double-digits.

NOW WATCH: Why the Dow plummeted after the Federal Reserve set interest rates at 0%