- Alex Sacerdote, founder of Whale Rock, was interviewed on a podcast about his strategy.
- His $8 billion fund bets big on the companies it believes will be the winners in new tech trends.
- The firm’s flagship fund was down 5.6% through the end of February, a person close to fund said.
Many hedge funds have had a tough run to start the year due to the volatility introduced into global markets by President Donald Trump’s administration.
One of those is Alex Sacerdote’s $8 billion Whale Rock Capital, whose tech-heavy portfolio has fallen. Among its top holdings at the start of 2025 was hedge fund favorite adtech firm AppLovin.
A person close to the manager told Business Insider that the firm is down 5.6% through February after a 12.9% loss last month. By comparison, the average hedge fund and the S&P 500 were each up a little over 1% over the same time period.
The Boston-based manager was a big winner of 2024, making more than 54% in its flagship hedge fund, and it was reportedly looking to raise hundreds of millions in new capital this year.
The manager declined to comment on its performance, but a recent episode of former hedge-fund backer Ted Seides’ popular Capital Allocators podcast revealed the firm’s investment process. In an hour-long conversation, Sacerdote explained to Seides why “volatility is a part of the ball game” in a strategy like his.
“Volatility comes with the tech territory, and it’s hard to totally protect against that,” Sacerdote said.
His firm has certainly been on a bumpy ride in recent years. The manager lost 9% and 40% in its main fund in 2021 and 2022, respectively, before surging 32% in 2023 and following that up with last year’s banner performance.
“When you’re at the top, know you’re not as smart as you think you are, and when you’re at the bottom, know you’re not as dumb as you think you are,” Sacerdote said about how he manages the ups and downs.
“Humility is an important aspect of this,” he added.
What is important for him is identifying winners in a trend that is set to take off. Examples he used were Nvidia after ChatGPT’s release and Amazon — the firm’s biggest position — as cloud computing took off.
Now, he said his team of 10 — which he said does 2,500 meetings with company management teams a year — is honing in on artificial intelligence infrastructure winners. Broadcom and Celestica are two large holdings, for example.
“Our thesis has been AI capex has been the place to be, but it’s not over,” he said about companies continuing to invest and build AI infrastructure.
He said the key going forward is not to be shaken by market wobbles, such as the volatility that came with the public release of Chinese AI company DeepSeek’s models.
“It’s important not to get shaken out of your process,” he said, and he believes in the tech industry’s ability to grow, even in the face of falling valuations.
“Every seven to 10 years, there’s a significant sell-off,” he said.
“Each sell-off has been followed by a major innovation cycle.”
