* Four managers to control 60 pct of Global Equities fund
* Short positions hurt returns in first quarter 2012
* Equities fund beat rivals in 2011, matched them in 2012
By Svea Herbst-Bayliss
BOSTON, April 11 (Reuters) – Hedge fund superstar Andreas
Halvorsen is putting more trust in his junior portfolio
managers.
Halvorsen, who runs the $16.7 billion Viking Global
Investors, told clients on Wednesday that he recently upped the
aggregate credit lines for a quartet of fund managers by 31
percent to $7.2 billion. The move comes less than a month after
James Parsons, one of Viking’s most senior managers, left the
firm.
“Our next four most experienced portfolio managers, Paul
Enright, Ning Jin, Hani Sabbagh and Scott Zinober, are at the
center of idea generation,” Halvorsen wrote, adding that the
with more money to spend the group will now be able to
“optimally size most of these ideas themselves.” They will now
directly control almost 60 percent of the Viking Global Equities
fund.
He also raised the credit lines for the next three portfolio
managers to $1.5 billion from $1 billion, or 6 percent of the
flagship fund.
Reuters obtained a copy of the letter.
The moves will free up the firm’s most experienced portfolio
managers and the firm’s co-chief information officers, Tom
Purcell and Dan Sundheim, to focus on “our very best ideas and
scale them appropriately,” the letter said.
As for himself, Halvorsen, a former Norwegian Navy SEAL who
got his start under industry titan Julian Robertson, said he
would spend more time on allocating capital. “(I) expect this to
continue as we balance a limited supply of capital with the
demand from a highly accomplished team.”
Viking, which has one of the $2 trillion hedge fund
industry’s best records, with an average annual return of 18.2
percent since its 1999 launch, bested most of the industry last
year and got off to a solid start this year. In 2011 the Viking
Global Equity fund gained 7.6 percent, when funds on average
dropped 5 percent. It rose 5.4 percent in the first three months
of 2012, roughly matching the nearly 5 percent gain of rivals.
Invesco Limited, Priceline.com,
LyondellBasell Industries and Apple, long-time
favorites of the hedge fund community, were among the firm’s
best performers, Halvorsen said in the letter.
However, Halvorsen, like some other managers, said he may
have been too timid during the first quarter.
Short positions, or bets against stocks, in the information
technology, financial and materials sectors all hurt the
portfolio as the stock market rallied amid hopes that the worst
of Europe’s debt crisis was over and that U.S. economic growth
would rebound.
“Our short positions partially offset the profits from our
longs,” he wrote, adding “we are disappointed by the lack of
meaningful short winners.
Halvorsen also assured investors that his managers are as
committed to delivering top returns as ever even after the firm
has faced a number of high-profile departures in the last years.
“We are confident that those we have asked to step up will do so
and that new opportunities will come to other Vikings in the
future,” he wrote.
Before Parsons left in 2012, David Ott, who co-founded the
firm with Halvorsen, departed in 2010 and Dris Upitis, who had
also been a management committee member, resigned in early 2011.
Several analysts have also left in the last year.
