Former Viking Global Investors partner Dan Sundheim has gotten off to a strong start since he launched his firm, D1 Capital Partners, last July.
Sundheim’s fund posted an 11.8 percent gain in the first quarter of this year, according to people familiar with the results. It is up 17.8 percent since its inception. This compares with just a 2.6 percent for the S&P 500 over the same period, according to the people.
At year-end, D1 had $8 billion under management, according to a regulatory filing. D1 declined to comment.
Sundheim officially became a so-called Tiger Grandcub because he worked for Viking founder and Tiger Cub O. Andreas Halvorsen, who in turn had previously worked at Julian Robertson Jr.’s Tiger Management as an analyst.
Sundheim joined Viking in 2002 as an analyst covering financial and business services companies. In January 2015, Halvorsen named him sole chief investment officer 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. He left Viking in June 2017.
D1 started trading in July 2018 with roughly $4 billion, one of the largest fund raises by a new hedge fund in years. The firm says it focuses on investing in the global internet, technology, telecommunications, media, consumer, healthcare, industrial, and real estate sectors.
In its first six months trading, D1 was led by its short positions and private investments, according to the people with knowledge of its results. It has a sizable stake in privately-held e-cigarette maker JUUL. In December, tobacco giant Altria bought 35 percent of JUUL at a $38 billion valuation.
Last July, D1 and other investors bought a $700 million stake in Lineage Logistics, a provider of temperature-controlled supply chain and logistics. In October D1 led a $600 million financing round for Instacart, the online grocery delivery company.
That fundraising boosted Instacart’s valuation to $7.6 billion. Before the financing was announced, data provider CB Insights said the company was worth closer to $4.35 billion.
D1’s gains this year are mostly led by publicly traded equities. At year-end, Netflix was its largest U.S. publicly traded long position, accounting for 11.7 percent of its $5.2 billion U.S. stock portfolio. The stock surged about 33 percent in the first quarter.
Amazon.com ranked second, accounting for roughly 8.2 percent of the U.S. stock portfolio. Its shares rose more than 18 percent in the quarter.
Rounding out the top-five holdings were hospitality giant Hilton Worldwide Holdings, homebuilder D.R. Horton, and leisure and entertainment giant Disney. Those stocks gained 15.8 percent, 19.4 percent, and 1.3 percent, respectively, in the first quarter.
Two other high-profile, internet-related companies ranked among D1’s top-ten holdings: Chinese e-commerce giant Alibaba Group Holding and Google parent Alphabet.
In the quarter, Alibaba surged about 33 percent, while Alphabet rose nearly 13 percent.
