By Louis Goss
It's like taking a brain and a heart out of a human and then planting a new brain and a new heart.Nir Bar Dea, Bridgewater CEO
Bridgewater Associates' new CEO has said the hedge fund must be completely "rewired" in order to boost its performance and find its "independence" in the wake of Ray Dalio's exit in October 2022.
In an interview with the Financial Times, Nir Bar Dea vowed to overhaul the Westport, Connecticut-headquartered hedge fund, which has carved out a position as one of the best performing money managers in the world since being started by Dalio in 1975.
"Everything has to get rewired," Bar Dea said. "It's like taking a brain and a heart out of a human and then planting a new brain and a new heart."
The ex-Israel Defence Forces officer, who was made Bridgewater's CEO in March 2023, added that the hedge fund needs to recapture its independence, as the money manager's performance has faltered since Dalio stood down.
"We're proud of Ray being a part of our history," Bar Dea said. "Ray is... his own person and has his own set of goals. He does a lot of things outside of Bridgewater and that's great. We want that for him. And then we need our independence."
Bridgewater, which as of last December had $72.5 billion in assets under management, posted a $2.6bn loss in 2023, having generated net gains worth $55.8 billion since its inception 49 years ago, according to research from LCH Investments.
The money manager's struggles saw it supplanted as the world's best performing hedge fund by Ken Griffin's Citadel in 2022 after its flagship Pure Alpha fund suffered heavy losses that year and recorded one of its worst annual performances ever in 2023.
The investment fund, which is known for its culture of "radical transparency," is notorious for its high staff turnover. During a talk at UVA's Darden School of Business in 2014, Dalio previously said around 25% of staff who join Bridgewater leave within the first 18 months.
In March 2017, the fund announced that former Apple executive Jon Rubinstein would be leaving his position as Bridgewater's co-CEO, just 10 months after taking up the role, having mutually agreed that he was "not a cultural fit."
Bridgewater's CEO said the fund is now focused on being "the best, not the biggest," in line with plans that have seen Bar Dea cap the size of Bridgewater's flagship Pure Alpha fund from $80 billion to around $50-60 billion.
Bar Dea is also experimenting with the use of artificial intelligence tools, including large language models used by OpenAI and Anthropic, to boost Bridgewater's performance by helping it make investment decisions.
Bridgewater Associates was contacted by MarketWatch for comment.
-Louis Goss
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05-09-24 0627ET
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