"We are focused on returns and do not want to become asset gatherers," Laffont wrote in an April 4 letter to investors. "We believe the right size for Flagship is $5 billion."

In April, founder and Tiger Management alum Philippe Laffont announced that his main technology-focused hedge fund had grown too large to invest efficiently, especially its "short" bets against stocks. He said Coatue would return about $2 billion from the more than $7 billion fund by June 30 following losses of 7.4 percent in the first quarter and 8.7 percent in March alone.

That decision frustrated some clients, who complained to Coatue that the move would lock in losses as opposed to giving the money manager a chance to make up some of the losing trades, according to a person familiar with the situation.

A spokesman for Coatue declined to comment.



Coatue appears to have listened. The firm recently told investors that the capital return will likely be delayed until the end of the year, according to the person. The amount of money given back will also be reduced: Coatue will downsize the flagship fund to between $5.5 billion and $6 billion, not $5 billion as previously announced.

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So far, the plan is working. The firm's flagship fund gained 5.1 percent from May 1 to May 23, according to a person with direct knowledge of the returns. It's still down 6.6 percent overall in 2014. By comparison, the Absolute Return Technology Index—which tracks hedge funds that invest in the sector—is up 0.16 percent through April.

Coatue has also told investors that there were no significant redemptions—requests from clients for their money—for the June 30 withdrawal period, according to the person.

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Part of the rationale for decreasing the amount returned is that Coatue has delayed fundraising for a new $500 million "hybrid" fund that plans to invest in both public and private companies. New money for the venture-capital style vehicle would have added to the size of the main hedge fund.

—By CNBC's Lawrence Delevingne