Economic Recession is Crushing These 5 Hedge Funds

In this article, we discuss 5 hedge funds that the economic recession is crushing. If you want to read about some more hedge funds that the economic recession is crushing, go directly to Economic Recession is Crushing These 10 Hedge Funds.

5. Whale Rock Capital Management

YTD Loss as of May 2022: 33%

Whale Rock Capital Management is an investment firm that operates from Boston. At the end of March 2022, the firm had a portfolio value of more than $8 billion with investments concentrated in the technology sector. Financial Times reports that the fund, which has huge stakes in sectors such as media, telecommunications, and tech, was down 33% at the end of May 2022. The fund, which employs a long/short equity strategy, started facing huge losses from late 2021. The fund had ended 2020 with returns of over 71%, with 86% of this coming from long-only bets. 

Alex Sacerdote of Whale Rock Capital Management

Whale Rock Capital Management has invested heavily in Alphabet Inc. (NASDAQ:GOOG), a California-based technology firm. Among the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG), with 2.3 million shares worth more than $6.6 billion. 

In its Q4 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:

“In contrast, we made a different kind of mistake about a decade ago. Google, now Alphabet Inc. (NASDAQ:GOOG), performed very well for us while we owned it. The company kept outperforming our assumptions and we kept lowering them to be conservative. “Trees do not grow to the sky.” The stock kept going up and our value grew but did not keep pace with the stock. It hit our estimate of fair value and we sold it with a nice gain, patting ourselves on the back. We kept following the company and what they actually did over the next several years was roughly double the assumptions we used to value it. Therefore, our value was too conservative, and we sold it too cheaply, missing many years of compounding. Fortunately, we experienced some volatility several years ago that allowed us to purchase Alphabet Inc. (NASDAQ:GOOG) (Google) again with a margin of safety.”