Reuters: Money: Hedge fund Viking to rely more on junior managers

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Hedge fund Viking to rely more on junior managers Apr 11th 2012, 20:17 By Svea Herbst-Bayliss BOSTON | Wed Apr 11, 2012 4:17pm EDT BOSTON (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. (Editing by Steve Orlofsky) Link this Share this Digg this Email Reprints

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