• Coatue Management is competing with some of the most powerful venture capital firms in Silicon Valley for a piece of the hottest startups, and is winning.
  • So far in 2020, the hedge fund wrote checks in 14 unicorn startups, or companies that are valued at more than $1 billion. They include Airtable, Rivian Automotive, Chime, and Impossible Foods.
  • In unicorn deals where it participated, Coatue led the round half of the time, according to a Business Insider review of PitchBook data. It indicates that startups see the value of working with the fund.
  • Coatue, run by Philippe Laffont and his brother Thomas Laffont, did not respond to a request for comment.
  • Visit Business Insider’s homepage for more stories.

A hedge fund is flying high over the startup world.

Coatue Management, a type of fund that raises outside capital to invest in a smorgasbord of asset types, has written checks into at least 14 unicorn startups so far this year, including breakouts like Chime, Airtable, and Rivian, according to data from PitchBook and media reports.

Its track record pits the hedge fund against some of the most well-endowed venture capital shops in Silicon Valley, who are all fighting for a stake in the hottest growth-stage startups before they go public or get acquired.

Traditional hedge funds tend to gravitate toward assets like stocks, bonds, currencies, and real estate and to allow investors to cash out periodically. But in recent years, hedge funds like Coatue and Tiger Global grew hot on startup investing because of their potential for large returns, even if those profits take longer to realize than other assets.

The ripple effects of the coronavirus pandemic have accelerated that strategy, Business Insider’s Callum Burroughs writes. The market swings and near-zero interest rates have made traditional investment strategies less appealing.

Coatue