D1 Capital Partners
D1 Capital Partners is a New York City-based global investment firm founded in July 2018 by Daniel Sundheim, who serves as its chief investment officer.[1][2] The firm deploys capital across public and private markets, employing long/short equity strategies in public equities alongside growth equity and other illiquid investments targeting later-stage companies.[3][4] Headquartered in the Solow Building at 9 West 57th Street, D1 Capital manages approximately $24.5 billion in assets as of October 2025, having grown from an initial $3 billion seed capital through strong early performance and investor inflows.[5][6] Sundheim, a former portfolio manager at Viking Global Investors where he worked from 2002 to 2017, built D1 Capital on a foundation of fundamental research combined with quantitative techniques to identify undervalued opportunities in sectors including consumer, healthcare, technology, and financial services.[7][8] The firm achieved notable early success, with its equity portfolio delivering nearly 24% returns through September 2025 amid favorable market conditions in technology and private liquidity.[9] In recent years, D1 Capital has expanded into dedicated private equity, targeting over $1 billion for its debut fund to deepen illiquid strategies while maintaining a focus on risk-adjusted returns.[10][5] Following performance challenges in 2022 and 2023, Sundheim implemented portfolio adjustments emphasizing diversification and reduced aggressiveness, reflecting adaptive management in volatile markets.[6]Founding and Leadership
Daniel Sundheim and Key Personnel
Daniel Sundheim founded D1 Capital Partners in July 2018 after 15 years at Viking Global Investors, where he advanced from analyst to chief investment officer, overseeing a team and generating returns that positioned him as a leading portfolio manager in public markets. A University of Pennsylvania Wharton School graduate with a bachelor's degree in economics earned in 1999, Sundheim began his career in merchant banking at Bear Stearns before joining Viking in 2002, building a track record rooted in rigorous analysis of global equities and sector-specific opportunities.[7][11][12] Sundheim's success at Viking, evidenced by his promotion to CIO and the subsequent rapid capital raise for D1—starting with over $500 million—stems from causal factors including deep pattern recognition honed over decades of market exposure, enabling identification of mispriced assets amid volatility. As D1's chief investment officer, he maintains centralized control over investment decisions, reflecting a philosophy emphasizing experience-driven intuition over rigid models, as articulated in recent discussions on business model evaluation. His personal net worth exceeds $2.6 billion as of October 2025, derived primarily from D1's performance and prior gains, underscoring the empirical validation of his approach.[2][13][14] Beyond finance, Sundheim holds a minority stake in the Charlotte Hornets NBA franchise, acquired in September 2019 as part of an investment group that expanded under Michael Jordan's ownership before the 2023 majority sale. In 2021, he relocated from New York City to Miami, Florida, establishing a firm office in Coconut Grove to leverage the region's growing financial ecosystem and tax advantages, a move mirroring broader hedge fund migrations amid post-pandemic shifts.[15][16][17] Public details on D1's other executives remain sparse, consistent with the firm's lean, meritocratic structure that prioritizes hiring research specialists over hierarchical layers, allowing Sundheim's CIO oversight to integrate insights directly into portfolio construction. This talent-focused model, drawing from Viking's analyst-driven culture, avoids bureaucratic expansion, enabling agility in a $20 billion asset base as of 2025.[2][6]Organizational Evolution
D1 Capital Partners was founded in July 2018 by Daniel Sundheim in New York City as a multi-strategy hedge fund initially emphasizing public market investments across global sectors. The firm quickly scaled its operations, attracting capital from endowments, foundations, family offices, and other institutional investors, which enabled expansion into a broader global footprint. This early phase marked a transition from Sundheim's prior role at Viking Global Investors, where he had managed significant portfolios, to establishing an independent entity with diverse asset exposure.[1][3] By the early 2020s, D1 Capital had evolved structurally to incorporate private market strategies alongside its hedge fund core, reflecting adaptations to market opportunities in illiquid assets. The firm deepened its private exposure through opportunistic investments, maintaining flexibility while building dedicated capabilities in areas like private equity. In October 2025, D1 announced plans to raise more than $1 billion for its inaugural dedicated private equity fund, signaling a formal shift toward structured illiquid vehicles to complement public strategies. This move aligns with industry trends among hedge funds diversifying into private markets for long-term value creation.[10][5] Operationally, D1 Capital relocated permanently to Florida as part of a broader migration of financial firms southward, influenced by favorable tax environments and operational efficiencies in areas like Palm Beach. Headquartered initially in New York, the firm adapted its structure to support global operations, enhancing research and investment teams to handle cross-market complexities without altering its hedge fund foundation. As of October 2025, the firm managed approximately $24.5 billion in assets, underscoring sustained scaling amid these evolutions.[18][5]
Historical Development
Inception and Rapid Growth (2018-2020)
D1 Capital Partners was founded in July 2018 by Daniel Sundheim, who departed Viking Global Investors in 2017 after serving as its chief investment officer since 2015, during which he oversaw substantial assets and delivered strong performance in equity strategies.[10][6] The firm launched with a focus on long/short equity investments in public markets, emphasizing fundamental, research-intensive analysis across global sectors including technology, consumer, healthcare, and financials.[19][1] Sundheim committed over $500 million of his personal capital to seed the venture, drawing on his established track record to attract institutional investors rapidly. The fund quickly amassed initial assets under management in the range of $3 billion to $5 billion, fueled by Sundheim's reputation from Viking, where he had managed multibillion-dollar portfolios with consistent outperformance.[20] This capital base enabled a concentrated portfolio approach, positioning D1 to capitalize on post-2018 market recovery following the late-2017 to early-2018 equity correction, which saw broader indices rebound amid improving economic conditions and monetary policy support.[21] In its first full year of 2019, D1 generated net returns of 36.8 percent, outperforming major indices and driving significant inflows from endowments, family offices, and other sophisticated investors.[6] The firm's research-driven bets in resilient sectors contributed to this success, setting the stage for accelerated growth amid favorable equity tailwinds. By leveraging deep fundamental insights, D1 demonstrated early resilience, aligning with Sundheim's philosophy of medium- to long-term value identification over short-term trading.[1] The year 2020 tested the strategy amid COVID-19-induced volatility, with global markets experiencing sharp declines in March followed by a V-shaped recovery driven by stimulus and tech sector strength; D1 navigated this turbulence to deliver 60.7 percent returns, showcasing the durability of its long equity positions and risk management.[6] Cumulative performance since inception yielded nearly 30 percent annualized returns, propelling assets under management to approximately $20 billion by year-end, reflecting robust investor confidence in the firm's public markets expertise during a period of heightened uncertainty.[2]Expansion Amid Market Volatility (2021-2025)
Following the rapid expansion of its assets under management to approximately $20 billion by late 2020, D1 Capital Partners experienced sustained AUM growth into the 2021-2025 period, reaching $27.8 billion by March 2025, despite heightened market turbulence.[2][22] This scaling occurred against a backdrop of macroeconomic pressures, including resurgent inflation peaking at 9.1% in the U.S. in June 2022 and subsequent Federal Reserve rate hikes from near-zero to over 5% by mid-2023, which exacerbated volatility in growth-oriented sectors.[5] The firm's private market positions, heavily weighted toward technology and venture capital, were particularly vulnerable during the 2022 tech correction, contributing to a 30.5% drawdown in its hedge fund that year as valuations in unlisted tech holdings plummeted amid rising discount rates and liquidity constraints.[5][10] In response to these challenges, D1 adapted by pivoting toward opportunistic public equity bets in undervalued European corporate turnarounds, leveraging deeper research into operational improvements and sector recoveries outside the overheated U.S. tech ecosystem.[23] This strategic shift helped mitigate the impacts of prolonged high interest rates, which compressed multiples on private tech assets while creating dislocations in traditional industries; unlike more concentrated peers overly exposed to mega-cap tech, D1's blend of public and private allocations provided a buffer through selective illiquid opportunities that gained traction as rate hike cycles peaked in 2023.[24] The ensuing AI investment boom from 2023 onward further aided navigation, with the firm's existing private stakes in AI-adjacent ventures benefiting from capital inflows into enterprise tech, though causal analysis indicates that diversified geographic and thematic exposure—rather than pure AI concentration—underpinned resilience against 2022-style corrections.[9] By 2025, these adaptations fueled a robust rebound, with D1's public equity portfolio achieving nearly 24% year-to-date gains through September, outperforming broader Tiger Cub benchmarks and leading the group with approximately 7% returns in Q1 and 11.8% through April.[25][24][26] Empirical evidence from peer comparisons highlights how D1's avoidance of over-reliance on volatile U.S. growth stocks during the inflation-rate hike nexus preserved capital for post-correction redeployment, enabling superior recovery dynamics relative to funds with narrower mandates.[27]Investment Approach
Public Markets Strategy
D1 Capital Partners' public markets strategy centers on a long/short equity approach, emphasizing bottom-up stock picking with a medium- to long-term investment horizon of 3-5 years.[14][28] The firm targets opportunities in sectors such as consumer, technology, healthcare, and business services, applying rigorous fundamental analysis to identify mispriced assets driven by underlying business dynamics rather than market narratives or short-term speculation.[14][29] The research process prioritizes deep diligence, including management meetings, financial modeling, industry analysis, and pattern recognition derived from historical data and over two decades of experience.[14][28] This bottom-up methodology focuses on evaluating business models, competitive moats, and management quality to forecast long-term value creation, deliberately avoiding macroeconomic bets or quantitative strategies that rely on broad market predictions.[14] High-conviction positions, often comprising 90-95% of decisions led by founder Daniel Sundheim, form the core of the portfolio, supplemented by hedging through diversified short positions to mitigate downside risks.[14] This approach differentiates D1 from passive indexing and speculative trading by seeking undervalued growth opportunities amid hype cycles, leveraging causal insights into company-specific prospects over reactive market volatility.[14][28] Post-2021 events like the GameStop short squeeze, the firm refined its shorting tactics to emphasize broader diversification, underscoring a commitment to disciplined, research-driven positioning in liquid equities.[14]Private Markets Strategy
D1 Capital Partners' private markets strategy originated as opportunistic allocations within its broader hedge fund mandate, allowing investors to opt into varying degrees of illiquid exposure from the firm's inception in 2018.[5] This approach focused on later-stage, non-control stakes in companies pursuing expansion capital, emphasizing sectors such as technology and enterprise software.[4] By 2025, private investments constituted approximately 60% of the firm's assets under management, prompting a shift toward dedicated vehicles, including a targeted $1 billion raise for its inaugural private equity fund to deepen commitments to illiquid opportunities.[5] This evolution reflects a deliberate expansion from ad hoc private deals to structured funds, prioritizing verifiable deal flow in high-growth areas like AI infrastructure over speculative narratives.[30] The strategy integrates private holdings with public market positions to pursue blended alpha generation, leveraging insights from liquid equities to inform illiquid selections while maintaining portfolio diversification. However, this crossover model has encountered challenges, including valuation resets in private bets that contributed to broader fund drawdowns, as observed in multi-year performance volatility amid tightening exit environments.[31] Empirical evidence underscores the variability of illiquidity premiums in venture capital and private equity, where realized returns often hinge on viable exit paths rather than projected multiples, countering pervasive over-optimism in industry benchmarks that frequently overlook markdown risks during market corrections.[10] Risk management in this domain emphasizes causal dependencies on liquidity events, such as IPOs or acquisitions, which have proven inconsistent amid prolonged holding periods and secondary market constraints. D1's framework privileges primary data from deal sourcing over media-amplified hype, acknowledging that private market outperformance requires rigorous vetting of enterprise viability in targeted tech subsectors, including AI model development and compute optimization, without assuming guaranteed premiums from illiquidity alone.[32] This prudent stance aligns with historical patterns where crossover funds have faced amplified losses from unexited privates during downturns, prioritizing capital preservation through selective, expansion-focused deployments over volume-driven commitments.[9]Research Process and Risk Management
D1 Capital Partners employs a fundamental, bottom-up research process centered on deep analysis of business models, management quality, and long-term company prospects, typically over 3-5 year horizons.[14] Analysts engage in team dialogues prior to finalizing investment memos, with initial positions sometimes established during ongoing research to capitalize on emerging convictions.[14] This approach prioritizes pattern recognition and commercial instincts derived from empirical data over quantitative models or short-term market signals, drawing inspiration from Jeff Bezos's "Day One" philosophy of sustained entrepreneurial focus and long-termism.[13][14] Risk management at D1 emphasizes preemptive controls to mitigate drawdowns, including conservative position sizing calibrated to withstand volatility spikes such as retail-driven squeezes, while avoiding derivatives and excessive leverage.[14] Following losses in 2021 and 2022, the firm reduced gross exposure from 218% to 165% and net exposure from 67% to 28% by mid-2022, alongside shrinking average top-10 short positions from 40% to 27% of capital.[6] Diversification was enhanced through broader stock coverage exceeding 800 names and expansion of the short portfolio to approximately 40 basket indices from fewer concentrated bets, temporarily halting single-name shorts in favor of hedges.[6][14] Stress-testing draws from historical events like the 2021 GameStop squeeze, informing sizing to limit tail risks, with an overarching focus on causal business fundamentals rather than consensus-driven momentum or bubble participation.[14]Performance Analysis
Quantitative Returns and Metrics
D1 Capital Partners' public equity portfolio has achieved a 3-year annualized return of 28.47%, corresponding to a cumulative return of 112.03% on weighted top 20 holdings.[33] Since June 2022, the public strategy has compounded at a net annualized rate of 33%.[24] Annual performance for the overall fund included gains of 36.8% in 2019 and 60.7% in 2020.[6] Losses followed, with the portfolio declining 15.7% in 2022 and 10.2% in 2023.[6] Private investments returned 3.7% in 2024, while public holdings advanced 18% through May 2025 and 20.5% in the first half of 2024.[23][34][35]| Year | Overall Fund Return | Public Portfolio Notes |
|---|---|---|
| 2019 | +36.8% | - |
| 2020 | +60.7% | - |
| 2022 | -15.7% | -30.5% (under S&P 500's -19.4%) |
| 2023 | -10.2% | - |
| 2024 (H1) | - | +20.5% |
| 2025 (through May) | - | +18% |