Viking to Return $8 Billion to Investors as Sundheim Leaves

(Bloomberg) -- Viking Global Investors, the hedge fund firm founded by Andreas Halvorsen, is returning about $8 billion to investors as Chief Investment Officer Daniel Sundheim departs to pursue his own business interests.

Sundheim, 40, who joined Viking as an analyst and rose through the ranks in his 15 years there, is leaving at the end of the month, according to a letter Viking sent to investors on Monday. Ben Jacobs and Ning Jin, two long-time portfolio managers, will take over the central portfolio as co-CIOs, the firm said.

Viking manages about $30 billion, making it one of the largest hedge funds in the world. The firm plans to return some of that money in August to allow its traders to hold smaller, more liquid positions, according to the letter. Viking said it has already sold off the necessary portion of its holdings.

Read More: Viking Global Fund Skewed Heavily to Tech

Sundheim, who’s been helping with the transition for months, is leaving because Viking couldn’t find a role that would give him the flexible investment mandate he was looking for, according to the letter. Sundheim didn’t return messages seeking comment.

“He is in a league of his own as a stock picker and portfolio manager," Halvorsen wrote, adding that Viking “looks forward to opportunities for collaboration” with Sundheim.

‘Rich List’

Viking Global Equities, its flagship fund, rose 7.1 percent in the first four months of 2017, rebounding from a 4 percent drop last year, the biggest annual loss since its inception in 1999. Many of its biggest holdings as of March 31 were technology companies, including Facebook Inc., Microsoft Corp. and Alphabet Inc., all of which dropped last week along with the rest of the sector.

Institutional Investor’s Alpha magazine included Sundheim on its annual “Rich List” for 2016, saying he earned $280 million in 2015 and $275 million the year before. Sundheim joined Greenwich, Connecticut-based Viking in 2002 as an analyst, according to the magazine. He started managing his own portfolio in 2005, became co-CIO in 2010 and gained sole responsibility for the job in 2014, according to the investor letter.

Sundheim is an avid art collector, with a rising profile in the art world. A trustee of the Museum of Modern Art, he attended the museum’s Party in the Garden on June 5, sharing a table near the podium with art adviser Sandy Heller and hedge fund manager Dan Och. In 2015, he executed a complex trade with Sotheby’s enabling him to acquire “Untitled (New York City),” a painting by Cy Twombly. A few months later, he paid about $35 million for Jean-Michel Basquiat’s “Dustheads" in a private transaction.

Jacobs joined Viking in 2009 as a consumer and materials analyst and became a portfolio manager three years later, according to the investor letter. Over time he’s added other sectors, such as transportation and technology. Jin has worked at Viking since 2007, first as an industrials analyst. He opened the firm’s Hong Kong office and managed a portfolio across industries in Asia. Together they already manage more than a third of Viking’s capital.

Investors who’d like to redeem their interests in the Viking Global Equities and Viking Long funds without penalty must make requests by July 13, with payments in early August, according to the letter. The Viking Global Opportunity funds won’t be making distributions, the firm said.

To contact the reporters on this story: Zeke Faux in New York at zfaux@bloomberg.net, Katya Kazakina in New York at kkazakina@bloomberg.net.

To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net, Sree Vidya Bhaktavatsalam, Steven Crabill