Viking Hedge Fund Moves Into Big Data Following Other Tiger Cubs

• February 28 2018
• Hema Parmar, Katherine Burton

Andreas Halvorsen, who heads one of the largest and oldest equity-hedge funds, is stepping into the world of big data.

Andreas Halvorsen, who heads one of the largest and oldest equity-hedge funds, is stepping into the world of big data.

The $25 billion Viking Global Investors has hired a small team to build a big-data platform, according to a person familiar with the firm. The data engineers, analysts and platform architects are collecting and cleaning alternative data sets to help inform Viking’s portfolio managers and analysts.

Halvorsen, who co-founded Viking Global in 1999 after working for legendary stock-picker Julian Robertson at Tiger Management, follows other Tiger Cubs in turning to quants to boost returns. Philippe Laffont had about 20 employees devoted to data science and software last year at Coatue Management and its venture fund has invested in artificial intelligence and big-data companies. Lee Ainslie opened two quantitative funds at Maverick Capital to outside investors in January after experimenting with computer-driven trading for years.

“People think of it as a paradigm shift,” Shannon Murphy, head of strategic content at Jefferies prime-services group, said of the industry’s move into big data. “If there is anything that emerges that gives them an edge, they will take advantage of it -- it’s another tool in their arsenal.”

Rose Shabet, Viking’s chief operating officer, declined to comment.

Bolting data teams onto discretionary firms hasn’t been an easy road to riches. Quants have labored to find useful and original trading signals in the fire hose of noisy data from social media. And old-school managers who tend to trust their gut have been slow to embrace the scientific process to make wagers. Paul Tudor Jones, who has tried pairing data scientists with managers to improve quantitative analysis, has failed to see a turnaround in his firm’s performance over the years.

Read why big data is a big mess for hedge funds

At hedge funds, the pace of hiring data scientists has picked up in the last nine months as they look for useful alternative data and to better exploit public information from more run-of-the-mill sources such as the U.S. government, said Murphy.

Firms have been struggling to beat the stock market and match historical returns in an investing world starved of yield, volatility and dispersion in asset prices. Viking’s hedge fund climbed about 12 percent last year, on par with other stock hedge funds but about 10 percentage points below the Standard & Poor’s 500 index. In January, the fund was up almost 2 percent, compared with 5.7 percent for the index.