Daniel Sundheim is on track to raise about $4 billion for his new hedge fund, making it one of this year’s largest launches.
D1 Capital Partners, run by the former chief investment officer of Viking Global Investors, will probably cap assets at that level and turn away more money, according to people with knowledge of the matter.
Investors are flocking to the stock-focused fund despite strict terms. Clients must put up a minimum of $20 million, which includes a mandatory allocation to some of the firm’s private equity investments, said the people, who asked not to be identified because the information is private. In a rare move, there’s also a maximum amount they can invest $200 million. If clients later want all their money back, it will take two years to redeem stock holdings and potentially longer for the private assets.
At the same time, New York-based D1 Capital is offering flexibility on fees. Investors can pay a 1 percent management fee on assets plus 25 percent of profits, or opt for 1.75 percent and 20 percent, one of the people said. Or they can choose a sliding scale where fees rise as D1 performs better: If the fund returns less than 5 percent a year clients pay no incentive fee but if it gains more than 20 percent they are charged about 40 percent of profits.
More than half of D1’s clients won’t also be invested in Viking, the person said, as Sundheim’s firm has a non-solicitation agreement with Andreas Halvorsen’s hedge fund.
A spokesman for Sundheim declined to comment.