It's the age-old problem for entrepreneurial traders looking to launch their own funds: You can't build a track record without money, but it's hard to raise money without a track record.
Yet managers coming out of Andreas Halvorsen's $60 billion hedge fund, Viking Global, seem to be handling it just fine. Since Dan Sundheim's massively successful launch of D1 Capital in 2018, there have been six more spinoffs from Viking that have collectively raised billions — and at least one more is in the works.
The flurry of startup activity has industry insiders, from recruiters to allocators, crowning Viking as the new go-to training ground for hot hedge-fund launches — not unlike Julian Robertson's Tiger Management and its many spinoffs, which are dubbed Tiger Cubs.
Industry experts and former Viking employees told Insider the unusual level of demand for Viking's alums was a testament to the firm's two decades of strong returns — as well as a culture that empowers its stock pickers with more autonomy than most competitors.
Advertisement
"For a new fund, what's really important to them is the DNA of where the person is coming from," Ilana Weinstein, the founder of the recruiting firm IDW Group, said.
Beyond Sundheim, launches include:
- Steve Mykijewycz's Masterton Capital (2020)
- Mina Faltas' Washington Harbour Partners (2020)
- Ben Jacobs' Anomaly Capital (2020)
- Brennan Diaz's Fernbridge Capital (2020)
- Tom Purcell's Alua Capital (2020)
- Grant Wonders' Voyager Global (2021)
Advertisement
Add to the tally the former Viking rising star Divya Nettimi, who is planning to launch her own fund in the coming months.
Representatives for Viking Global and each of the ex-Viking fund managers declined to comment.
Founded in 1999 by Halvorsen, Brian Olson, and David Ott, Viking is a Tiger Cub itself that has been one of the most successful of its generation. Old investor letters show a gain of more than 84% in 2000, the firm's first full year, which was when the tech bubble first started to burst.
Lately, the firm has turned to the private-investments space with the goal of making money by turning young companies into unicorns.
Advertisement
Now, disciples of Halvorsen are spreading across the industry. The firm has had former employees launch funds before — names include Jesse Ro, who founded Tiger Legatus, and Josh Abramowitz, the founder of Deep Creek Capital. But since Sundheim's massive debut of D1 Capital, there's been a surge of demand for Viking talent from seeders, institutional investors, and other limited partners (LPs).
So-called multistrategy funds like Citadel, Point72, Millennium, which juggle a variety of strategies across asset classes, are also considered a robust training ground for prospective founders because portfolio managers tend to run their own teams and focus only on their book — as if they had their own firms.
Viking is a traditional long-short equity fund in most respects but is nonetheless distinct from many of its fellow Tiger Cubs because its portfolio managers and analysts are given more autonomy, similar to a multistrategy fund, people in the industry told Insider.
"This obviously much better prepares people to launch a fund than just being an analyst," a former Viking portfolio manager told Insider.
Advertisement
"I think, in some ways, Viking carries some of the clout in LPs' minds that the top multistrategy funds do," Weinstein said, adding that Viking shared similar DNA as multistrategy funds in its focus on tempering volatility and protecting against losses.
Two people familiar with Viking's setup attributed much of Viking's unique structure to Halvorsen, Viking's CEO. They said he delegated more than some of his peers, including the coveted position of chief investment officer. That allows talented people to rise through the ranks. Sundheim, Purcell, and Jacobs each became the chief investment officer before starting their own funds, for example.
And then there's the money.
Sources said successful people at Viking could make serious cash for themselves thanks to the firm's structure, which gives even analysts credit lines and profit attribution for top ideas. A Viking staffer with a strong track record, therefore, likely has earned enough money to take the financial risk involved in launching a new fund, a former portfolio manager said.
Advertisement
In turn, when people leave to start their own fund, many of them are able to show investors how much of their personal wealth they're putting in the new firm — an indication of just how successful they were at Viking.
"People leave with giant pots of money and then put that all into their own fund. That has an implicit endorsement to it," one Viking investor said.
Sundheim is an extreme example. He worked at Viking for more than 15 years and put more than $500 million of his own money into D1. Now, like Halvorsen, he's a billionaire.
"Success is in the dollars," the investor said, referring to giant payouts earned by successful Viking portfolio managers.
Advertisement
What does all the launch activity mean for Viking? The firm has never backed or seeded someone who has left their firm, according to several people familiar with the hedge fund's workings. But it does occasionally try to retain talented people thinking about hanging out their own shingle by offering them more responsibility and a corresponding compensation boost, these people said.
For people who prefer to focus on investing and nothing else, Viking's setup can be ideal.
"Viking is a really great seat" because Andreas handles everything else, including fundraising and back-office functions, one former employee said.
Still, there will inevitably be people who want to be the boss. And for them, a world of allocators is waiting at the ready to back the next hot founder with a cream-of-the-crop résumé.
Advertisement
"The Viking pedigree carries a lot of weight because Andreas has built one of the best hedge-fund businesses that's ever existed, simple as that," a former employee said.
Viking Cubs
Dan Sundheim, D1 Capital, 2018
Sundheim, 44, deserves credit for some of the recent buzz surrounding Viking personnel as the most successful alum to strike out on his own. He took over as chief investment officer of Viking in 2014 and left in 2017 to launch his technology-focused fund. He started trading in July 2018 with $5 billion, including $500 million of his own money.
The fund posted a 60% return last year and now has $25 billion in assets under management, including a substantial private-investment operation that has plowed cash into at least 35 companies this year. Performance got whacked in January amid the meme-stock short squeeze, but D1 has recovered and is up 14% through September, according to a person familiar with the matter.
D1 stands for "day one," a nod to Amazon founder Jeff Bezos' philosophy of avoiding complacency and continually adapting.
Mina Faltas, Washington Harbour Partners, 2020
Faltas, 44, launched Washington Harbour in May 2020, and the firm now manages $1.1 billion in assets focused on small- to mid-cap stocks in technology, media, and telecoms (TMT), consumer services, business services, and government services. He made 90% in his first year trading.
Faltas is somewhat unique compared with others who have launched recently from the Viking stable. He joined Viking in 2008 from JPMorgan and left as a senior investment analyst in 2011 to cofound Nokota Management, an event-driven hedge fund.
Steve Mykijewycz, Masterton Capital Management, 2020
Mykijewycz, 41, who covered consumer stocks at Viking, launched Masterton last year with $200 million. The fund, focused on the real-estate and consumer sectors, managed $250 million in assets as of January.
Ben Jacobs, Anomaly, 2020
Jacobs, 40, joined Viking in 2009 after five years at Blackstone, progressing from analyst to portfolio manager to co-chief investment officer over a 10-year run. He and Ning Jin oversaw investments from 2017, after Sundheim left, to 2019, when Jacobs jumped ship to launch Anomaly.
Anomaly got off the ground in late 2020 with $600 million and a focus on the consumer, cyclicals, and healthcare sectors. It managed $1.8 billion in assets as of March. Through July, the fund had lost money for 2021, Insider previously reported, but a source familiar with the fund said the manager is up slightly through September. Anomaly returned 17% in 2020.
Brennan Diaz, Fernbridge Capital, 2020
Diaz, 36, covered internet, media, and software stocks at Viking until 2015, when he left to join Junto Capital, the fund launched by his fellow Viking colleague James Parsons.
He launched Los Angeles' Fernbridge Capital in 2020, which managed $640 million in assets at the end of last year. The fund focuses on stocks in consumer services, the internet, media and telecoms, and enterprise services.
The fund is named after a bridge in Ferndale, California, near a farm that Diaz's grandfather grew up on, according to a person familiar with the fund. The Fernbridge, a historic landmark constructed in 1911, has withstood a battery of floods and earthquakes over the past 110 years.
Tom Purcell, Alua Capital, 2021
Purcell spent 16 years at Viking, joining as an analyst covering financials in 1999 and leaving in 2015 after a two-year run as co-chief investment officer with Sundheim.
Purcell, 50, managed his family office Lake Trail Capital for several years before deciding to launch Alua Capital with the former Lone Pine managing director Marco Tablada.
Alua started trading in late 2020 and was managing $2.2 billion in assets by the end of the year.
Grant Wonders, Voyager Global, 2021
Wonders joined Viking in 2014 after two years at Blackstone, quickly making a name for himself with sharp bets on TMT stocks like T-Mobile, Netflix, and Facebook. His performance is the stuff of legend within Viking, and he's understood to have produced some of the highest — if not the highest — profits in absolute dollars of any analyst in the company's history, according to people familiar with the matter.
The 31-year-old launched Voyager Global in spring, raising over $1 billion in assets, and was up nearly 14% in the first six months of trading, according to people familiar with the matter. The fund's name is a callback to NASA's 1977 Voyager mission, which launched two space probes that remain the farthest-out man-made objects in the universe.
Divya Nettimi, launch expected in 2022
Nettimi, 35, covered TMT stocks alongside Wonders while at Viking, with more of a focus on software and consumer companies. Amazon was a major winner in her book, according to a person familiar with the matter, and she had phenomenal success, similar to the Voyager founder.
She joined Viking in 2014 after four years at Goldman Sachs and two years at Stanford getting her MBA. She left in spring to start laying the groundwork for her fund, which has yet to be named. It's expected to launch early next year.
ncG1vNJzZmivp6x7o8HSoqWeq6Oeu7S1w56pZ5ufony4tNhmraKjmaO0brPLqJmapF2ewG7AzqlkoZ2UnLJustSnm2akkaq7pLSMramaoZ6eu6h5xqumrqaUYn9xfpBmaGk%3D