Crossover Funds

Investment funds that invest in both public and private markets. Two structural approaches: (A) a public fund allocates “up to X%” of its AUM to privates as permitted in the LPA, allowing capital deployment without raising a dedicated fund; (B) a dedicated team and vehicle for the private strategy, requiring outside capital and defined carry. Tiger Global Management started with Option A — Chase Coleman investing his own capital into privates — before evolving to Option B when privates became core to the strategy. Coatue raised dedicated funds for each strategy (early and late stage) while other Tiger Cubs like Light Street funded from existing AUM.

Where this appears

• A Friend Recently Asked About… (tweet) — Dave Ambrose on crossover investing structures after ~7 years of exposure to the model.