(Bloomberg) -- Viking Global Investors is raising a structured equity fund, joining the likes of Coatue Management in seeking to provide capital to cash-hungry startups, a move that may help private companies delay raising money at lower valuations amid tumultuous public markets.
Viking has begun conversations with prospective investors about the vehicle, which will be led by its head of credit, Patrick Dowd, according to people familiar with the matter.
The Greenwich, Connecticut-based firm is targeting at least $1 billion for the fund, which will provide cash to both public and private companies, the people said. A spokesman for the firm declined to comment.
Meanwhile, Coatue is seeking to raise $2 billion for its effort and has already gathered $1.2 billion from anchor investors. Its fund will mostly back publicly traded companies, with about 20% earmarked for private startups. JPMorgan Chase & Co. is also considering raising a fund with a similar strategy.
Structured equity generally includes convertible debt, senior equity or debt plus warrants. It differs from traditional growth equity funding, which tends to take the form of common equity, and enables companies to raise financing without solidifying a new valuation.
Viking’s hedge fund lost about 9% this year through May. The firm, led by co-founder and Chief Executive Officer Andreas Halvorsen, had more than $47 billion of capital under management as of Dec. 31, its website shows.
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