Tiger Global, Coatue, GIC: How Crossover Funds Approach Hong Kong

Crossover funds — investors that deploy capital across both private and public markets — have become dominant participants in Hong Kong pre-IPO rounds. Their approach differs from traditional venture capital in three key respects. First, they underwrite to a public-market valuation framework from day one, modelling the company against publicly traded comparables even at the Series C/D stage. This produces more conservative private valuations than traditional VC but also means their pre-IPO investments are less likely to face a down-round adjustment at IPO. Second, they negotiate for IPO-related protections: registration rights requiring the company to use best efforts to complete an IPO within a specified timeframe (typically 3-5 years), and most-favoured-nation clauses ensuring their terms are no less favourable than any other investor in the round. Third, they often take a ‘public investor’ posture in pre-IPO due diligence — requesting audited financials, management background checks, and legal compliance reviews at a level that anticipates sponsor due diligence. For companies considering crossover funding, the message is: these investors will treat your company as a pre-public asset, not a venture bet. If you are not ready for that standard of disclosure and governance, traditional late-stage VC may be a better fit.