(Bloomberg) -- When General Electric Co. spun off its GE Vernova unit, Viking Global Investors rotated all of its GE exposure into shares of the newly public clean-energy business.
That bet has paid off so far for Andreas Halvorsen’s hedge fund firm, with the stock soaring more than 40% since it started trading on March 27. It’s Viking’s biggest winner in the second quarter — boosting both its hedge and long-only funds, according to a letter to investors seen by Bloomberg.
The funds gained 8.1% and 13% this year through July, respectively, a person familiar with the matter said.
“The company’s power and electrification businesses are poised to benefit from structural changes in electricity demand, driven in part by the buildout of data centers to support the compute needs of artificial intelligence,” Viking said in the letter.
Still, Viking said it’s cautious about Vernova’s wind business, citing uncertainty about the outcome of the US elections in November. The firm still holds the position but said it has “trimmed” it from peak levels.
A spokesperson for Stamford, Connecticut-based Viking, which manages about $49 billion, declined to comment.
Other hedge funds have also snapped up Vernova shares. Coatue Management started a new stake in the second quarter that was worth more than $570 million as of June 30. D1 Capital Partners almost doubled its existing stake in the period.
Viking also said in the letter that clients yanked $546 million from the hedge fund and $371 million from the long-only pool after Chief Investment Officer Ning Jin announced he’ll leave at the end of August. Last month, the firm accepted about $326 million into the hedge fund.
It’s common for a firm to grant investors a one-time option to withdraw cash when there’s a notable change at the firm, such as a departing CIO. When Dan Sundheim left Viking in 2017, it returned $8 billion.
The firm also revealed to investors that in 2019 it started a Viking Best Ideas portfolio and is now ramping up its assets. That vehicle boosts the firm’s 20-largest stock holdings — with returns feeding into Viking’s equity hedge fund.
“The genesis of VBI was based on the observation that our largest longs and shorts tend to outperform the overall portfolio over time,” Halvorsen said in a separate letter.
(Updates Vernova stock advance in second paragraph, adds chart after ninth.)
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