| Viking Global Investors’ New York offices at 280 Park Avenue Photo credit: Wikimedia Commons/Beyond My Ken |
Viking Global Investors is the latest hedge fund and Tiger Cub to undergo a major shake-up and shrinkage of assets.
The hedge fund firm headed by O. Andreas Halvorsen told investors that Dan Sundheim has stepped down as chief investment officer after 15 years with the firm and it is returning $8 billion in assets to investors in Viking Global Equities, its long-short fund, and its long-only Viking Long Fund, according to a letter obtained by Alpha. Ben Jacobs and Ning Jin will serve as co-CIOs and manage the central portfolio.
Sundheim is leaving the firm “to pursue entrepreneurial interests,” according to the letter.
“Viking’s senior management team, including Dan, has explored alternative models that would have given Dan a role compelling to him while also consistent with Viking’s objectives,” Halvorsen wrote in the letter. “The strength of the team and its potential to advance, combined with Dan’s desire to expand his personal impact through a very flexible investment mandate, led us to come up empty-handed in our search for an optimal role for him within Viking.”
Viking said Sundheim has helped the firm transition over the past several months.
Sundheim joined Viking in 2002 as an analyst covering financial and business services companies. In January 2015, Halvorsen named him sole-CIO when then–co-CIO, Thomas Purcell, left the firm following a six-month sabbatical. Sundheim qualified for Alpha’s annual Rich List ranking of the world’s richest hedge fund managers for his earnings in 2014 and 2015.
Viking has long been considered one of the most successful Tiger Cubs. It has also been widely credited with its bench strength and talent development.
At the beginning of this year, it had $27.2 billion under management, down from $33 billion the year before, when it rose to become the eighth-largest hedge fund firm in the world.
Like many Tiger Cubs, it posted a loss in its long-short fund in 2016, dropping 4 percent. Its long-only fund, however, returned 3.9 percent. This year, VGE had gained 6.5 percent through April.
Halvorsen said it plans to return $8 billion in early August, with roughly two thirds coming from VGE and one third from VLF.
“We are determined to set the firm up for continued strong performance and long-term success and have decided to reset to a smaller size,” he wrote. “We believe that our strong investment staff combined with a reduction in assets under management is a potent mix. Everyone on the team has ample runway to grow, and the smaller, more liquid positions will give us greater operating flexibility as we respond to attractive opportunities.”
Viking also said any investor may redeem without penalty for a July 31 redemption date.
The firm also said Viking Global Opportunities, its hybrid fund, will not make distributions to investors. It also said it may open that fund later this year “in response to a private investment pipeline that we view as attractive and robust.”
Viking also said gross exposure in VGE is now about 165 percent, adding, “we see opportunity to raise that level from time to time to enhance returns.”
