This spring, Nir Bar Dea finally got the role he’d been working toward for years, becoming sole chief executive officer of the world’s biggest hedge fund.
In his new job, he was looking to reshape the giant Bridgewater Associates. His goals: Keep clients and revamp the quirky culture of the company founded almost five decades before by Ray Dalio, who demanded “radical transparency” from his co-workers as a means to reach his idea of corporate nirvana — meaningful work and meaningful relationships.
Yet the tight-knit, insular nature of the firm, where many employees join right out of college, and often turn to each other for companionship well beyond the confines of the office, was about to cause trouble for the new boss.
Within weeks of Bar Dea’s promotion, a previous romantic relationship with a colleague burst back into view. Paul Ross — an executive pushed out in Bar Dea’s first major corporate overhaul — accused the company of favoritism, age and sex discrimination, after Bar Dea’s former girlfriend Erin Miles and her ex-fiance Sean Macrae replaced him in the shuffle.
The accusations spurred a board-level investigation in April. The review, conducted by law firmClarick Gueron Reisbaum, found there was no merit to Ross’s claims, according to people familiar with the process.
The relationship between Bar Dea and Miles was not kept secret from management or fellow employees and no one disputes certain facts. The two first got involved around 2016, when Bar Dea had been at Bridgewater for about a year and Miles had been there for seven. The relationship ended a few years ago, according to people at the firm.
Yet the recent incident, based on interviews with more than a dozen people familiar with the firm, all of whom requested anonymity because of the sensitive nature of the episode, offers a rare window into the distinctive culture that evolved under its iconoclastic founder. It also highlights the difficulties Bridgewater, historically led almost exclusively by men, faces in navigating workplace relationships as the company promotes more women into its top ranks.
While Ross brought a formal internal complaint, other employees have privately expressed concern to colleagues about the optics of the management changes, according to people familiar with the conversations.
Bridgewater Co-Chairs Margo Cook and Mike McGavick said in a statement that a former employee asserted that one of “our best people, a woman with over 14 years of experience and outperformance at the company, was promoted for reasons other than her extensive qualifications,” even though he had previously praised her. “To advance his own self-interest, he perpetuates deeply harmful dynamics that have been used against the most capable people, and women specifically, since the beginning of time.”
Ross didn’t return calls seeking comment.
Close Ties
Because many employees at Bridgewater are in their 20s and 30s and work long hours in the Connecticut suburbs far outside New York City, romantic relationships are common, people who have worked there said.
The close ties were also fueled by Dalio’s unusual management style. He oversaw Bridgewater using the Principles — hundreds of rules he created to run his life and his business. Those directives encouraged a culture of open disagreement. Employees spent hours grading each other, and most meetings were recorded for later study.
By all accounts, the work environment at Bridgewater isn’t for everyone, with some recruits leaving the firm after a short time. But others embrace it, and say the direct manner in which they interact with their colleagues helps create the kind of meaningful relationships that Dalio espoused.
And the togetherness extends beyond work. There are almost 100 clubs where employees can do everything from play softball to rescue pets. Co-Chief Investment Officer Bob Prince helped establish Grace Community Church in New Canaan, which some Bridgewater employees attend.
Those who do stay often serve long tenures, driven by cultural fit, healthy compensation and non-compete clauses that become more stringent as executives enter the top ranks.
While Bridgewater does not bar co-workers from dating, company rules say that such relationships are prohibited when the individuals are in a direct reporting line, or when one individual has meaningful influence or control over the employment of the other person, thus creating an actual or perceived conflict of interest.
Across the corporate landscape, stricter standards on personal behavior have thrown consensual relationships involving top executives into the spotlight. Companies including BP Plc, Cboe Global Markets Inc., McDonald’s Corp. and BlackRock Inc. have seen exits in their top ranks in recent years over personal relationships and inadequate disclosures about them. Bridgewater’s situation shows that even when relationships are disclosed, it can lead to thorny dynamics and complaints of favoritism.
During the four or so years of their relationship, Bar Dea and Miles both climbed quickly through the ranks.
By 2019, he was co-head of the investment engine — Bridgewater-speak for research, trading and portfolio construction — one of the top jobs at the firm reporting to Greg Jensen, co-CIO. Miles, 36, had risen to co-head of equities research.
She had been named a partner by 2021 and would later join the investment committee. Bar Dea had jumped to deputy CEO. He became co-CEO in 2022, just seven years after joining.
Because of their prior relationship, Bar Dea isn’t involved in any decisions around Miles’s pay or promotions, according to people familiar with the firm’s internal practices.
Previously, Miles had been engaged to Macrae, 37, who joined the firm in 2008. Macrae, who’s also a partner, hadbeenco-head of research analytics and led Bridgewater’s currency investment and China research. Macrae is now married to another Bridgewater employee, who until recently had been Bar Dea’s chief of staff.
In March, Bar Dea and other members of the leadership team undertook a major restructuring that involved firing about 100 people, or roughly 8% of the staff. As part of the reshuffle, the firm aimed to fill management positions in its investment business with employees who had risen through that unit, the people said.
Ross, a 43-year-old who worked at Bridgewater for two decades and met his wife there, was replaced by Miles and Macrae as co-heads of the investment engine, the same role Bar Dea previously held.
Must-Win Battle
The elevation of Bar Dea, 42, marked the end of a 12-year transition away from Dalio, an era of CEO churn and mostly poor performance that caused some investors to bolt.
The March shakeup marked the biggest change since Dalio relinquished control of Bridgewater in September 2022, transferring his voting rights to the board and stepping down as one of three co-CIOs. That allowed the next generation, led by Bar Dea and Jensen, to take control — in what Bar Dea called in a Bloomberginterviewlast year “a must-win battle.”
His fight now revolves around improving performance. The firm’s flagship Pure Alpha II fund has annualized about 3.5% since the start of 2012. Hedge fund assets fell to $97 billion as of June, according to Pensions & Investments, down from about $126 billion a year earlier. The firm has said it will cap the amount of money it manages in its hedge funds, without specifying what that limit will be. The firm also has strategies beyond its hedge funds and in all managed about $124 billion as of the end of last year, according to a regulatory filing.
This year, the main fund has climbed 7.5% through October, though its equities group has struggled.
Bridgewater also faces closer scrutiny after the publication last month of Rob Copeland’sThe Fund, a book that describes a dysfunctional organization under Dalio and his obsession with the Principles.
Bar Dea’s rise at the firm is barely mentioned in the book, but he does appear in one episode in 2018 involving a different intra-Bridgewater romance. In it, he grilled a female employee about a sexual relationship she was having with a colleague that Bridgewater executives claimed wasn’t properly disclosed — a line of questioning that a person familiar with the incident confirmed to Bloomberg.
In Copeland’s account, which the firm denied, Bar Dea demanded she tell him the dates that she’d had sex with her co-worker.
She refused.
