Andreas Halvorsen of Viking Global (Bloomberg) |
Several of the largest hedge fund firms with roots to Julian Robertson, Jr.’s Tiger Management have gotten off to strong starts this year. Tiger Cub and Norwegian native Ole Andreas Halvorsen’s Viking Global Investors’ three main funds, for instance, not only easily outperformed the Standard & Poor’s 500, which rose 0.44 percent in the first quarter, or 0.95 percent including dividends, but the Nasdaq Composite as well, which rose about 3.5 percent.
In the first quarter, the Greenwich, Connecticut firm’s long-short fund, Viking Global Equities, rose 4.8 percent while Viking Long Fund surged 6.5 percent.
Meanwhile, Viking Global Opportunities, which launched on January 1 with $1.5 billion, rose 5.3 percent. The firm describes Viking Global Opportunities as a liquid-illiquid — or so-called hybrid — fund designed to accommodate illiquid securities. The fund has an initial five-year lockup, which “applies to all our investors,” the firm wrote in its third-quarter letter to investors in its Viking Global Equities and Viking Long funds.
It’s not apparent what drove Viking’s gains in the first quarter but it may well have been led by Viking’s big bet on health-care stocks.
Entering the year, its 10-largest long positions accounted for roughly 36 percent of the hedge fund and 37 percent of the long-only fund. Its five-largest holdings were all health-care-related stocks, most of which posted strong gains in the first quarter. Valeant Pharmaceuticals International, for example, its No. 4 holding, surged about 37 percent in the quarter.
Shares of Irish drugmaker Actavis, its fifth-largest position, jumped more than 15 percent and global drugstore chain Walgreens Boots Alliance, its third-largest long, rose 11 percent for the first quarter. Its No. 2 holding, drugmaker AstraZeneca, rose 1.5 percent in the first three months of the year.
The biggest position in both Viking funds was Illumina, accounting for roughly 5 percent of both portfolios. However, shares of the developer of DNA sequencing equipment were flat for the quarter.
Last July the firm announced that Daniel Sundheim, who had served as co-chief investment officer for four years, had been named sole CIO and manager of the firm’s “central portfolio.”
Meanwhile, the hedge funds and long-only funds managed by Stephen Mandel, Jr.’s Lone Pine Capital rose between 5 percent and more than 6 percent.
The results suggest that shorts did not cut much into returns in the first quarter.
Valeant and FleetCor Technologies, a seller of fuel cards and other specialized payment products, were two of the six-largest holdings in Lone Pine’s flagship long-short hedge fund, Lone Cypress.
Otherwise, most of its largest positions posted small gains. For example, The Priceline Group, Lone Cypress’ largest long holding accounting for 5.4 percent of equity, rose 2 percent, while MasterCard, also 5.4 percent of equity, was flat.
Valinor Management posted a 4 percent gain in the first quarter. New York based Valinor, which manages $3.7 billion, is headed by David Gallo, who is a great-grandcub as well as a Tiger Cub. He previously worked at New York-based Bridger Management, founded by Roberto Mignone, who in turn had once worked at Tiger Cub John Griffin’s New York-based Blue Ridge Capital. Gallo also previously worked at Tiger Management.
Valinor’s largest holding at year-end was FleetCor.
Solar energy company SunEdison, its third-largest position, surged 23 percent while No. 4 holding Cheniere Energy rose about 10 percent.
However, these gains were offset by its No. 2 holding, LendingClub, which plunged 22 percent in the quarter after having gone public last December.
Lastly, Lee Ainslie’s Jr.’s Dallas-based Maverick Capital rose 5 percent for the quarter and the Maverick All Long fund was up 8.6%.
