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Tiger Global Poised to Reap $1 Billion Profit on Peloton

Sonali Basak, Hema Parmar and Sophie Alexander

(Bloomberg) -- Chase Coleman’s Tiger Global Management spent the past five years amassing a stake of almost 20% in exercise company Peloton Interactive Inc. That is about to pay off handsomely.

The money manager will record a profit of at least $1 billion on its investment in the startup, based on the company going public at $26 a share, said a person familiar with the matter who asked not to be identified because the information is private. The firm is poised to reap at least a 70-fold increase on its initial investment in 2014, according to data from EquityZen, a marketplace for private stock sales. It also participated in subsequent funding rounds.

The profits may be even greater for Tiger Global, which is the biggest shareholder in the maker of internet-connected exercise bikes and treadmills. Peloton priced at $29 per share Wednesday, meaning Tiger’s stake is worth about $1.35 billion. Tiger Global declined to comment.

It’s another win for Coleman’s firm, which runs both hedge fund and private venture investments. Assets have swelled to $36 billion this year, an 80% increase since May 2015.

He’s been helped by big wins, including an early investment in Flipkart, an e-commerce firm that helped change India’s internet retail industry. Tiger Global made about $3 billion on the company and an additional $5 billion on JD.com Inc. That’s helped Coleman, 44, vault into the ranks of the 500-member Bloomberg Billionaires Index with a $4.6 billion fortune.

Tiger Global invested in Peloton through its private arm, which has more than $18 billion in assets and has made more than 200 investments in 30 countries. Its hedge fund has also been one of the best-performing in the industry, having only two down years since 2007.

Still, some of its bets aren’t faring as well. Last year, Tiger invested in Juul Labs Inc., which faces a federal inquiry over its marketing practices and renewed public scrutiny after a wave of vaping-related illnesses and deaths. On Wednesday, Juul announced that CEO Kevin Burns will resign.

Other major Peloton investors include founder John Foley, whose 6% stake is worth $485 million at $29 a share, and True Ventures, with a holding of 12%.

(Updates with Peloton shares pricing in third paragraph.)

--With assistance from Tom Metcalf.

To contact the reporters on this story: Sonali Basak in New York at sbasak7@bloomberg.net;Hema Parmar in New York at hparmar6@bloomberg.net;Sophie Alexander in New York at salexander82@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Peter Eichenbaum

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