Here's the First Woman to Launch a Billion-Dollar Hedge Fund

Hema Parmar, Bloomberg News

Buildings in lower Manhattan in New York, U.S., on Thursday June 17, 2021. New York state's pandemic mandates were lifted last week, after 70% of the adult population has now been given at least one dose of a coronavirus vaccine. Photographer: Victor J. Blue/Bloomberg , Bloomberg

(Bloomberg) -- Divya Nettimi started her own hedge fund Monday with more than $1 billion of commitments, making it the largest launch of a woman-led firm in the industry’s history and among the biggest of any to debut this year.

Avala Global has begun investing the majority of the cash, with the rest expected to arrive early in the first quarter, according to people familiar with the matter, who asked not to be identified because the fund’s inception hasn’t been announced publicly. A representative for the New York-based firm declined to comment.

Nettimi, a portfolio manager who oversaw more than $4 billion at Andreas Halvorsen’s Viking Global Investors before leaving last year, will bet on and against stocks in the consumer, business services and technology, media and telecom sectors, while also backing private companies, the people said. The money gathered so far doesn’t include investments from Viking clients because anti-competition agreements prohibit her from soliciting them until November.

Her ability to kick-start the firm now is all the more remarkable as a sharp decline in equity markets has made fundraising more difficult, with some of the industry’s most prolific tech-focused stock-pickers experiencing their worst year on record. This year’s largest new launch is Alex Karnal’s Braidwell, which started in April with $3.5 billion.

Another highly anticipated debut is Mala Gaonkar’s SurgoCap Partners. She’s expected to launch her firm in 2023 with at least $1 billion.

Read more: Hedge Fund Startups Led by Women Are Finally on the Rise

Nettimi, 36, and Gaonkar, 52, will be part of an exclusive club of women leaders in an industry dominated by men, with their debuts coming almost a decade after Leda Braga took the helm of Systematica Investments, then an $8.3 billion collection of quant funds that was spun out from Michael Platt’s BlueCrest Capital Management.

While Avala Global’s launch should be applauded, “it’s also damning that it’s a historical first in 2022” for a $4 trillion industry with 12,000 funds, said Dominique Mielle, a former partner at Canyon Partners.

Having so few funds led by women means they can face more scrutiny over their performance, said Mielle, the author of Damsel in Distressed: My Life in the Golden Age of Hedge Funds. “People may use them as a gauge for their entire gender, rather than just their own fund,” she said.

Avala’s clients will face some constraints. They won’t be able to pull their cash for the first two years and, if they choose to do so after, it will take an additional two years for them to withdraw all of their capital, the people said.

Nettimi joins a growing list of Viking alumni to set out on their own in recent years. The most prominent among them is Dan Sundheim, who stepped down as chief investment officer to found D1 Capital Partners in 2018, building it into a $22 billion behemoth. In 2020, former Viking co-CIOs Ben Jacobs and Tom Purcell started Anomaly Capital Management and Alua Capital Management, respectively. Last year, former Viking portfolio manager Grant Wonders launched Voyager Global Management.

(Updates with comment from Mielle starting in seventh paragraph.)