Daniel Sundheim is a rare thing in hedge funds these days: a company man. He joined Viking Global Investors back in 2002 as a lowly analyst. A few years later he was managing his own portfolio, and by 2014 he was Chief Investment Officer at the Tiger cub.
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, 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.
We can probably chalk Sundheim up as another victim of the massive and growing sinkhole that has opened up under the hedge fund industry in the last year, swallowing legacy money managers into a gaping morass of spoiled bets and investor outflows. But what, precisely, was that “flexible investment mandate” that Sundheim wanted?
If last year was any guide, it might be the ability to lose money hand-over-fist without losing one's job. Viking's flagship fund, Viking Global Equities, ended 2016 4 percent in the red, thanks to pharma longs and industrial shorts that should have been pharma shorts and industrial longs. As Viking wrote to investors in a year-end letter:
"In a year when sector selection turned out to be a significant driver of returns, our concentrated bets, being at a decade high, proved to be largely wrong," the letter said.
As a result of all that being largely wrong, Viking reduced Sundheim's staff from six to three. In subsequent months the fund picked up again, but evidently not enough to convince Sundheim and Viking O. Andreas Halvorsen that everything was peachy between them. Regardless, Halvorsen had nice words for Sundheim on his way out:
“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.
We look forward to Sundheim's follow-on act. We'd suggest Valhalla Capital, but apparently that's already taken.
Viking to Return $8 Billion to Investors [Bloomberg]