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Viking Global's CIO, David Ott, stepping down

Date: Thursday, April 15, 2010
Author: Reuters

Viking Global Investors, the $12 billion hedge fund run by Andreas Halvorsen, said its chief investment officer was stepping down and some of his positions were liquidated.

David Ott, who co-founded Viking with Halvorsen in 1999, will retire from active management and move to an advisory role in order to spend more time with his family, Halvorsen said in his quarterly letter to shareholders.

Ott's portfolio has been transferred to other managers at the fund and some positions have been liquidated, Halvorsen said without being more specific. The sales had a "minimal impact" on the fund's overall positions, he wrote.

A spokesman for the Greenwich, Connecticut-based fund declined to comment.

Because of the management change, Viking said all its investors would have the opportunity to remove money from the fund on July 31 regardless of any lock-up agreements that would otherwise limit withdrawals.

Viking, which has returned more than 10 times the gain in the MSCI World Index over the past five years, had a mediocre first quarter, Halvorsen also noted in the letter. The fund lost 0.1 percent in the first quarter while the MSCI World Index rose 4.7 percent and the Standard & Poor's 50 gained 5.4 percent.

Some of the poor performance resulted from a large position in credit card company MasterCard (MA.N), which lost about 1 percent in the first quarter. The stock was the fund's third-largest position at the end of 2009.

Halvorsen said Viking had sold off its entire position in Mastercard by March 31.

Another problem was that bank stocks the fund had shorted gained more than bank stocks the fund had purchased.

"We investigated our assumptions and analysis on all of these positions and in most cases confirmed our prior findings and retained the bulk of our bank exposures," Halvorsen wrote in the letter. Top bank holdings at the end of the quarter included Bank of America (BAC.N) and JPMorgan Chase & Co (JPM.N).

Four of the fund's top 10 long positions at the end of the first quarter were new to the list, Halvorsen said. The new stocks in the top 10 were Tyco International (TYC.N), MetLife Inc (MET.N), News Corp (NWSA.O) and Barclays PLC (BARC.L).

Ott's departure was earlier reported by the blog DealBreaker.

In the 1990s, Ott and Halvorsen worked together at Julian Roberston's Tiger Management, where Ott was a consumer sector specialist.

Ott is the second of the three original Viking founders to depart. Brian Olson left in 2005 and later filed a wrongful termination lawsuit. The Delaware Supreme Court upheld a ruling in favor of Viking on the lawsuit in 2009.