‘Whale Rock’ Not A Parody Hedge Fund Name, But Actual Firm Actually Killing It

And actually proving that investors can’t resist a hedge fund named for heavy things.
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By US Coast Guard [Public domain], via Wikimedia Commons

One of the possible Whale Rocks. By US Coast Guard [Public domain], via Wikimedia Commons

All the good hedge fund names are taken, and have been for a long time. This is an established fact. Look at the mess made by a certain one-and-future titan of the industry when he was forced by circumstance to ditch the perfectly good name he came up with looking at his monogrammed hand towels on the toilet one day: Point72 Asset Management, Stamford Harbor Capital, Cubist Systematic Strategies, Creating Rubric Capital. These are all real names that Steve Cohen has applied to various business entities he either runs or doesn’t run but sort of controls or owns depending on who’s asking. Even way back in 2006, there were no good hedge fund names left, so former Fidelity Investments star Alex Sacerdote went with “Whale Rock Capital Management.”

We don’t know whether the Whale Rock Sacerdote refers to is the one in Narragansett Bay or the one off Nantucket or one of the other two Whale Rocks in Massachusetts or the reservoir in California or one of the ones in Utah, Cornwall, Australia or South Africa. We don’t know if he just made it up. What we do know is that Sacerdote was able to intuit the most important thing about hedge fund names, long before there was academic research behind it: Your hedge fund doesn’t have to have a good name—and Whale Rock Capital Management is certainly not a good name—but it does have to have a name combining words that convey weight and heft and gravitas. And what is heavier than a whale and a rock put together? Nothing. And so investors have been flocking to Whale Rock Capital Management not just in spite of its patently ridiculous moniker, but because of it. And also maybe because it makes a lot of money.

Whale Rock Capital Management, which has returned nearly 40 percent this year, has stopped accepting new capital after its assets grew to $2.5 billion, a person familiar with the hedge fund’s decision said….

In the first 11 months of 2017, the fund returned 38.9 percent, far outpacing the average hedge fund’s 7.6 percent gain through November. Over the last five years, the firm has returned an average 21 percent a year.

Hedge fund Whale Rock stops taking in new money amid strong returns [Reuters]

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