This content is from: Portfolio

Viking Loses CIO, Plans to Return $8 Billion of Capital

The hedge fund firm founded by Tiger Cub O. Andreas Halvorsen tells investors Daniel Sundheim will be leaving the firm and it is returning capital in two of its funds.

  • Imogen Rose-Smith

Viking Global Investors, the asset management firm founded by onetime Tiger Management Corp. senior managing director O. Andreas Halvorsen, has told investors that it is returning $8 billion of capital to investors as chief investment officer Daniel Sundheim is leaving the firm.

“Dan Sundheim has stepped down as CIO after 15 years of exceptional contributions to Viking and will leave the firm on June 30 to pursue entrepreneurial interests,” Halvorsen said in the letter, dated June 12. Existing portfolio managers Ben Jacobs and Ning Jin will serve as joint CIOs.

“Viking has decided to return capital in VGE and VLF as part of this transition, and we have completed the necessary liquidations,” Halvorsen continued, referring to two of Viking’s main funds, the long-short equity Viking Global Equities fund and the long-only Viking Long Fund. “We are excited about the future and how the changes we are making will set Viking up for continued success.”

Halvorsen told investors he thinks a smaller Viking — which managed $27.2 billion at the start of the year — will have the best opportunity for success. Viking employs 11 portfolio managers and 14 analysts supporting Jacobs and Jin, with four more expected to start this summer. A spokesperson for the Greenwich, Connecticut-based firm declined to comment.

Co-founded by Norwegian born Halvorsen in 1999, Viking has proved to be one of the most successful of the so-called Tiger Cubs, or those hedge fund firms founded by former analysts and traders who worked at Julian Robertson Jr.’s famed Tiger Management. Halvorsen, a former platoon commander on the Norwegian Navy Seal team, was a senior managing director and director of equities at Tiger. But the flagship Viking Global Equities fell 4 percent last year, its worst-ever annual performance.

Sundheim, who joined Viking in 2002, had a highly successful career at the firm for many years. A graduate of the Wharton School of the University of Pennsylvania, Sundheim, 40, took over co-CIO responsibilities in 2010 after the departure of Viking co-founder and CIO David Ott. Then, in 2015, it was announced that Sundheim would take over as the lone CIO after former co-CIO Thomas Purcell left the firm.

A source familiar with the situation said Sundheim has been talking for some time about moving on from Viking. Halvorsen’s letter suggested as much.

“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. “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.”

The source says Sundheim, who did not respond to an e-mailed request for comment, is planning to run his own family office. During his 15 years with Viking he certainly acquired the means to do so. In 2015 Sundheim and his wife purchased an apartment at 778 Park Avenue for $28.5 million that had once been owned by ABC Sports and News executive Roone Arledge. The couple already owned the apartment directly above it, which previously belonged to the Brooke Astor. The Sundheims are also developing a reputation as art collectors.