Philippe Laffont’s $70 billion Coatue Management is preparing to launch a new fund to invest in AI and tech companies, both public and private, as it shifts its strategy amid more startups staying private longer.
The company’s plans for this fund are to invest primarily in companies expected to grow in value. It will invest in both publicly traded companies and late-stage startups and can also sell investments and retain cash if needed. This differs from traditional funds, which are usually fully invested.
Coatue is closing its current $8 billion fund to new investors and guiding them to this new fund instead. The new fund may invest about 20% in private companies and could launch by mid-year.
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This mixed approach has benefits. Public stocks change in value daily, while private companies don’t, which can help reduce volatility. At the same time, public investments make it easier to buy and sell when needed.
Last year, Coatue launched another fund called the CTEK fund, aimed at everyday investors. It invests in both public and private tech companies and can put up to 50% into private ones.
Coatue raised $4 billion for CTEK, including money from investors linked to Jeff Bezos and Michael Dell. The fund charges a management fee and takes a share of profits above a certain level.
The CTEK fund has invested in AI company Anthropic. Coatue also invests in both public and private companies through its hedge fund and runs other funds focused on startups and climate tech.
The move shows Laffont believes traditional stock investing is becoming outdated, especially since many private companies now operate like public ones. People say investors who don’t adapt could miss better returns.
“Before, many companies went public quickly, but now they stay private longer,” Laffont said in an interview. “So investing in private companies helps you benefit earlier instead of waiting for them to go public.”
Even after big losses in tech funds a few years ago, many traditional stock investors are still moving toward private markets. One reason is that many fast-growing companies are choosing to stay private longer, helped by ample private funding, active secondary markets, and the opportunity to achieve high valuations without going public. For example, OpenAI and Anthropic have raised money at very high valuations, while SpaceX has stayed private for over two decades and is only now considering an IPO.
In recent years, Coatue has focused more on investing in startups and fast-growing companies, launching new funds and presenting itself more as a venture capital firm.
It has also updated its website, moving away from a simple, secretive style to one that shows many of its investments, shares insights, and highlights its work with startups, with less focus on its hedge fund business.
Coatue has grown a lot over time. It managed about $10 billion in 2016, which rose to around $60 billion by 2021. Its assets later dropped to $42 billion when tech markets declined, but the drop didn’t last long.
Now, its assets have reached a record $70 billion, making it one of the largest hedge funds in the world.
Many large private tech companies today are more professional and organized than typical startups, said Matt Kennedy from Renaissance Capital. Some hold regular financial meetings, follow standard accounting rules, file confidential reports with regulators, and have more active share trading. As a result, they are increasingly looking like public companies.
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