Andreas Halvorsen‘s Viking Global is one of the big names in the hedge fund world and has attracted a large pool of investments owing to its track record. Assets under the fund’s management amount to $32.4 billion at the end of March. The technology sector accounts for 16% of Viking Global’s well-diversified portfolio. We decided to take a closer look at the fund’s top picks in the sector, which include Google Inc (NASDAQ:GOOGL), Micron Technology, Inc. (NASDAQ:MU), and Alibaba Group Holding Ltd (NYSE:BABA).
Halvorsen is a tiger cub owing to his association with the veteran investor Julian Robertson. He launched his own fund in 1999 with two former colleagues from Tiger Management, David Ott and Brian Olson. However, Olson left the fund in 2005 and Ott followed him in 2012. The fund returned about 89% in its maiden year and 119% between 2005 and 2010 as compared to an 11% gain for the MSCI World Index. Currently the market value of Viking’s public equity portfolio stands at $25.81 billion. Viking Global returned 4.8% in the first quarter and outperformed the S&P 500 Index by 3.8 percentage points. The fund returned 17.7% annually since inception. It also returned 14.9% annually over the last 10 years and outperformed the S&P 500 Index by 6.9 percentage points per year during this time. These are impressive numbers for a large hedge fund. What is most impressive is that Viking Global lost only 0.9% in 2008 when most investors lost their shirts as the S&P 500 declined by 37%.
Let’s first take a step back and analyze how tracking hedge funds can help an everyday investor. Through our research we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith (and money) in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 84 percentage points, returning over 142% (read the details here). We believe investors can achieve better returns by following the smart money into only their best investment ideas and avoiding their high fees.
Viking initiated a position in Google Inc (NASDAQ:GOOGL)’s Class A shares during the first quarter of 2005. During the first quarter this year the fund boosted its stake in the $373 billion tech giant by 120% to 1.64 million shares valued at $908.85 million. The holding represents 3.52% of the fund’s portfolio value, up from 1.81% a quarter earlier. Halvorsen also holds a large position in Google’s Class C shares (GOOG) consisting of 841,147 shares valued at $460.97 million. Recently, rumors have surfaced that Google Inc (NASDAQ:GOOGL) might be interested in acquiring Twitter Inc (NYSE:TWTR), which have resulted in spiking the stock price of the micro-blogging website. The drivers behind this speculation include the sell-off in Twitter’s stock, the resignation of its CEO, and an array of deals that the company recently signed with Google regarding the inclusion of tweets as part of Google’s search results. As far as verified facts go, Google Inc (NASDAQ:GOOGL) is getting more serious about snatching a greater share of the mobile payments market. The company recently announced that it will not charge credit card companies any fee for payments made through its upcoming Android Pay. After Viking, Boykin Curry‘s Eagle Capital Management is the largest stockholder of Google Inc (NASDAQ:GOOGL) within our database, holding some 1.14 million Class C shares valued at $626.38 million.