Viking Global Up 8.3% In 2015; Hedge Fund Boosts Valeant Stake

Large long positions in Amazon.com (AMZN) and Alphabet Inc. (GOOG), alongside a well-timed short on the Energy sector, were just three trades that helped Andreas Halvorsen’s long/short fund, Viking Global Equities rack up a gain of 4% for the fourth quarter of last year. For the full-year, the fund gained 8.3% with volatility of 9.9% compared to a return of 2.1% for the fund’s benchmark, the MSCI World Index and 1.4% for the S&P 500.

The Viking Long Fund (VLF), by contrast, generated a return for investors of 5.7% in the fourth quarter and 4.5% for the full-year, according to a letter sent to investors on January 14th 2016 and reviewed by ValueWalk.

Viking Global: Positive but mixed year

While both of Viking’s funds were able to outperform significantly their benchmarks last year, the funds experienced sizable losses among some key longs, which cost several percentage points of performance. Specifically, in the fourth quarter, Valeant (VRX) cost VLF and VGE 1.6%. For the full-year, Viking’s most costly longs were Cheniere Energy Inc. LNG (-1.4%), Mallinckrodt Plc. MNK (-1.2%), Alibaba Group Holding Ltd. BABA (-1.0%) and Micron Technology Inc. MU (-0.8%).

On the long side, the top performing sectors for both funds were Information Technology and Consumer Discretionary. The worst performing sectors for both the full-year and fourth quarter were healthcare in VGE and energy in VLF.

Alphabet was the biggest winner for both funds in the fourth quarter, contributing 1.7%. Alphabet was also VLF’s biggest winner for the year contributing 2.6%. VGE’s biggest winner was an Energy short contributing 4.6% to performance. Amazon.com was the second largest winner for VLF and third largest winner for VGE adding 2.3% and 2.4% respectively to performance for the full-year.

Viking Global: Valeant and Cheniere remain undervalued

Viking Global owns more than 5 million shares of Valeant Pharmaceuticals across its two funds, making the hedge fund one of the embattled pharma company’s largest shareholders.