Tiger Global’s Now-Worthless FTX Bet Had Bain’s Due Diligence

(Bloomberg) — Bain & Co. was among consulting firms that helped conduct due diligence for Tiger Global Management’s investment in now-defunct crypto exchange FTX, according to people familiar with the matter.

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Tiger Global, which pays Bain more than $100 million a year to research private companies, has now written down its $38 million FTX stake to zero, the people said. Sam Bankman-Fried’s oversight of a vast web of FTX-linked entities was one of the risks highlighted during the due-diligence process, but the money manager still believed it was a sound investment at the time, one of the people said.

A representative for Chase Coleman’s Tiger Global declined to comment, and Bain didn’t immediately reply to messages seeking comment.

This month’s implosion of FTX has caused billions of dollars of potential losses for investors and sparked legal and regulatory probes. It also prompted questions about how warning signs were missed by institutional investors, including hedge funds and venture capital firms. Ontario Teachers’ Pension Plan was among them, writing off its entire $95 million investment, while Sequoia Capital marked down its $214 million wager to zero.

Read more: Investor Studied Crypto For Years, Then Missed FTX’s Red Flags

Tiger Global’s FTX investment was a tiny portion of its $12.7 billion Private Investment Partners 15 fund. The firm first backed FTX in October 2021, when the crypto exchange was valued at $25 billion, and again in January at a $32.5 billion valuation, according to PitchBook data.

The FTX bet was one of 358 venture capital investments Tiger Global made last year, and one of 290 so far in 2022, according to PitchBook.

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