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Bridgewater Associatesis an Americaninvestment managementfirm founded byRay Dalioin 1975. The firm serves institutional clients includingpension fundsendowmentsfoundations, foreigngovernments, andcentral banks.

It utilizes aglobal macroinvesting style based on economic trends such asinflationcurrency exchangerates, and U.S.gross domestic product. Bridgewater Associates began as an institutional investment advisory service, graduated to institutional investing, and pioneered therisk parityinvestment approach in 1996.

In 1981, the company moved its headquarters fromNew York CitytoWestport, Connecticut, and currently engages 1,700 employees. As of 2018, it had US$124.7 billion inassets under management.3

The firms history includes the pioneering of industry strategies such as:currency overlay, the separation ofalphaandbetastrategies,4the creation ofabsolute returnproducts, andrisk parity.5According toFinancial News, the company was the fastest growing asset manager from 2000 until 2005 when it stopped accepting new accounts.6Its assets under management have increased by 25% each year during the 2001-2010 decade with employees at eleven times their year 2000 levels.7The companysDaily Observationsresearch is reportedly read by leaders of central banks and managers of pension funds around the world.8

Bridgewater Associates was founded by Ray Dalio in 1975 from an office in hisManhattanapartment. At that time, the business consisted exclusively of advising corporate clients and the management of domestic and internationalcurrencyandinterest raterisks.910The firm later changed its emphasis and began selling economic advice to governments and corporations such asNabiscoandMcDonalds.11

The company began publishing a paid subscription research report called theDaily Observationswhich inspired McDonalds Corp. and its main supplier to become clients in the early 1980s.12Another client was Banks of Mid-America and its treasury department director, Bob Prince, later joined Bridgewater Associates as co-CIO.2In 1981, the company moved its offices from New York City to Connecticut.13

The companys first account was funded by a US$5millionfixed-incomeinvestment throughHilda Ochoa-BrillembourgofWorld Bankin 1987.14In the mid-1980s, the firm changed its business focus from currency and interest rate management to global bonds and currencies forinstitutional investors.11As a fixed income and currency adviser to institutional clients, the company gained a reputation as a currencytraderand a developer of techniques foroverlaying currencies. In 1990, it launched a hedge fund portfolio using monies fromKodakandLoews Corporation9and began formally offering its currency overlay products to its clients.15

Bridgewater Associates developed several innovative investment strategies during the 1990s such asinflation-indexed bondscurrency overlayemerging market debtglobal bondsand super-long duration bonds. The firm also pioneered the separation of alpha and beta investments and developed a strategy called alpha overlay which involved a portfolio of 20 uncorrelated investments, leveraged for risk or return and combined with cash or an investment market benchmark.12

The firm launched itsPure Alphafund and began to marketportable alphainvestment strategies in 1991.4ThePure Alphafund did well during the markets downturn of 2000 to 2003 and, as hedge funds became more popular, the company expanded its assets through its connections with various underfunded pension funds, some of which were already clients.16In 1992 the firm introduced its global bond overlay program.7In 1995, company executives participated in the discussions at theU.S. Treasury17and advised federal government on the development ofinflation-indexed bonds.1819

Bridgewater launched itsAll Weatherhedge fund and pioneered therisk parityapproach toportfolio managementin 1996.2021The firms assets under management grew from US$5billion in the mid-1990s to US$38billion by the year 2003.22In June 2000, the firm was ranked as the best performing global bond manager for that year and the prior five years byPensions & Investmentsmagazine.23In 2002, the company was ranked by Nelson Information as the Worlds Best Money Manager in recognition of the 16.3% return on itsInternational Fixed Incomeprogram.24The firm received the Global Investor Awards for Excellence-Global Bonds award in 2003.22The following year the company received theGlobal Pensions (magazine)Currency Overlay Manager of the Year award,25and 2 best in class awards from the PlanSponsor Operations Survey.26

In 2006, the companys flagshipPure Alphafund began returning money to its clients in order to maintain its investment strategy and enforce its capacity limit. The firm began moving all of its clients into alternative strategies (either itsAll WeatherorPure Alpha Major Marketsfunds), thereby eliminating the traditional investment approach from its portfolios.27That year it was honored byPlanSponsor Magazinewith the Lifetime Achievement Award28and theGlobal Pensions magazineCurrency Manager of the Year award29and theMoney Management Letters, Public Pension Fund Award for Excellence and the Alternatives Manager of the Year award.30

By 2007, the firms total assets under management grew to US$50billion (from US$33billion in the year 2000).12According to a 2007 article inBarronsmagazine, nobody was better prepared for the global market crash than its clients and subscribers to its Daily Observations. The company began sounding the spring of 2007 about the dangers of excessive financial leverage.31The companys researchers reviewed the public accounts of most of the major financial institutions around the globe and found that estimated future losses due to bad debts totaled US$839billion. In December, these conclusions were reported to theU.S. Treasury Departmentwhen company founder Ray Dalio met with U.S.Treasury Secretarystaff and otherWhite Houseeconomic advisers.32BridgewatersPure Alphafund spared its investors from most of the stock markets meltdown in 2008.33However, this strategy was not successful in 2009 when economic growth responded faster than anticipated and theDow Jones Industrial Averageincreased by 19% while the companysPure Alphafund reportedly gained a mere 2% to 4%.33Bridgewaters Pure Alpha II has posted a historic average return of 12 percent with only 3 losing years.34SenatorJohn McCainvisited the firm and addressed company employees during his2008 presidential campaign.35TheTeacher Retirement System of Texas(TRS) invested in $250 million in a stake in Bridgewater Associates Intermediate Holdings, LP.36

Ray Dalio, the companys founder, began using the term d-process in February 2009 to describe thedeleveraginganddeflationaryprocess of the subprime mortgage industry as distinct from arecession.31That year, the company was termed the largest hedge fund in the U.S. and it received theAlternative Investment News7th Annual Hedge Fund Industrys Lifetime Achievement award and PlanSponsors Hedge Fund Manager of the year award.3738When the U.S.gross domestic productfaltered in 2010, the firm had significant gains on their investments inTreasury bondsand othersecurities, and in November founded the US$10billion,Pure Alpha Major Marketsfund which brought the companys total assets under management to more than US$100billion.3233In 2011 the firm received several honors. It was ranked number one onInstitutional Investors worlds top 100 hedge funds list.39It received the Macro-Focused Hedge Fund Firm of the Year award40and theaiCIOHedge Fund Industry Innovation Award.41Absolute Return + Alpha(AR) ranked the company number one in its Hedge Fund Report Card42and Billion Dollar Club categories.43

At the end of May 2016, Connecticut is expected to approve a plan which will give Bridgewater Associates $22 million in grants and loans in exchange for job training, job creation, and building renovations. The company also must agree to retain 1,402 jobs they already support in Connecticut. The company could also become eligible for as much as $30 million in urban tax credits.44

Between 2014 and 2016, theRegents of the University of Californiawithdrew $550 million from Bridgewater Associates also due to concerns about Bridgewaters future leadership.45In June 2018, it was announced to clients and employees that Bridgewater would change its corporate structure and become a partnership. By June 2018, theTeacher Retirement System of Texas, the Ontario Municipal Employees Retirement System, theSingapores sovereign wealthfund and theInternational Monetary Fundhad invested in Bridgewater Associates.46

In September 2017, Bridgewater announced plans to launch an investment fund inChinawithChinese governmentsapproval.47

According to Ray Dalio, Bridgewater Associates is a global macro firm.48It uses quantitative investment methods to identify new investments while avoiding unrealistic historical models.15Its goal is to structure portfolios with uncorrelated investment returns based on risk allocations rather than asset allocations. Additionally, the company is reported to accept funds from only institutional clients such as pension funds, foundations, endowments, and central banks rather than private investors.1014

The company divides its investments into two basic categories: (1)Beta investments, whose returns are generated throughpassive managementand standard market risk, and (2)Alpha investments, whose goal is to generate higher returns that are uncorrelated to the general market and are actively managed. The principle of separating alpha and beta investments was introduced by Dalio in 1990 and gained the recognition of other equity managers beginning in the year 2000. The firm is reported to be the first hedge fund manager to separate alpha and beta investment strategies and offer dedicated investment funds for each.1249

According toBloomberg,Bridgewater uses an investing system that combines traditional diversification with wager[s] on or against markets around the world and attempts to invest in instruments and markets that do not move in lock step with each other.10To guide its investment strategies, the companys top executives have compiled hundreds of decision rules which are the financial corollary to the firms employee handbook,Principles,and these investment guidelines have been incorporated into the firms computers analysis.32

The firm offers three hedge funds to its clients: thePure Alphafund, theAll Weatherfund and thePure Alpha Major Marketsfund. It also publishes awhite paper, called theDaily Observations, which is read by investors worldwide on a subscription basis.50

Bridgewater Associates launched its flagship fund,Pure Alpha, in 1989. The fund is described as a diversified alpha source that invests across a group ofasset classes.4It was designed to balance risk amongst a variety of non-correlated assets throughactive management.51It includes 30 or 40 simultaneous trading positions in bonds, currencies,stock indexesandcommoditiesto avoid affecting prices by concentrating funds in a single area.52After placing some of the companys excess cash into thePure Alphahedge fund to increase its investing discretion.7The fund was closed to new investors in 2006 when it reached its pre-determined, maximum funds level.53As of 2011, the fund is reported to have lost money in only three of its 20 years of existence and had an average annualized return of 18 percent.8The success ofPure Alphais reportedly due to a portable alpha management style that trades among many asset classes.7

A second fund, calledAll Weather, was launched in 1996 and highlighted low fees, global inflation-linked bonds and global fixed-income investments. The fund began as the founders personaltrust fundand was subsequently opened to clients.32The goal of the fund was to create high,risk adjustedreturns that exceeded the return of the general market.3254TheAll Weatherfund contains more than $46 billion and is one of the largest funds in the U.S. as of 2011.55In April 2009, after the collapse ofLehman Brothers, the fund moved into safe portfolio mode which included nominal and inflation-linked bonds and gold instead ofequities, emerging marketdebt, andcommodities. The fund is reported to contain 40% inflation-linked bonds, 30%Treasury bills, 20% Treasury bonds and 10% gold.56

Under the guidance of co-CEO, Jensen, the firm created thePure Alpha Major Marketsin 2011 with $2.4 billion from existing clients.57In the summer of 2011 the fund was opened to a group of outside investors who had made a total advance commitment of $7.5 billion. At that time, it was reported to be the largest hedge fund launch. The fund was established to provide an investment vehicle similar to the companysPure Alphafund but with enhancedliquidityby focusing on the major markets such as European bonds.12The launch of this fund in 2011 brought the companys total assets under management to more than $100 billion.58

The companys Daily Observations is awhite paperand was the flagship product and service offered by the company. It has been characterized as comprehensive, with some editions being up to 43 pages in length. It is reportedly read, on a subscription basis, by clients, leaders of central banks and managers of pension funds around the world and said to be one of the most widely forwarded pieces of market analysis in the industry. It is the centerpiece of the companys outreach program and according to the company, it is read by members of the U.S. Treasury, [and] the Executive Office of the President of the United States.59failed verification

In 1981, the company moved its headquarters 50 miles north ofNew York CitytoWilton, Connecticut, and in the late 1990s it moved to a larger office space on a corporate campus in Westport, Connecticut.13As the company continued to expand, it became the sole tenant at the 22-acre campus. The firms headquarters is described as retreat-like and is surrounded by the trees of a formernature reserve.15The campus contains three buildings made of midcentury modern fieldstone and glass. Since 2000 its staff has grown from 100 to 1200 employees, and the firm has taken office space in three additional buildings in the area.7In an effort to consolidate its offices, the company made plans to build a 750,000- square-foot headquarters in Stamford, CT, about 15 miles from its present location in Westport, but cancelled the project in 2014.60

Bridgewater Associates grew from 100 employees in 2003 to 1,200 employees in 2011.6162The company is reported to be one of the few hedge fund managers that hire its analysts and employees right out of college and from the annual pool of graduates from elite universities, such as those from theIvy Leagueas well asMITandStanford.63Employees are transported daily in a fancy bus that ferries them fromManhattanto the companys Westport offices. According to an article in Bloomberg, about a quarter of all new hires leave within the first two years.10Those that remain are reported to receive generous compensation and form bonds with fellow employees that are like family8and the companys founder helps to pay for any employees that wish to learn theTranscendental Meditation technique.64

Dalio, the founder, relinquished hischief executive officer(CEO) title in July 2011 to take on the role of mentor. The companys administration consists of three co-CEOs; Greg Jensen,Eileen MurrayandDavid McCormick; the former undersecretary of the Treasury Department.65The company also has three co-CIOs (chief investment officers); Dalio, Bob Prince and Greg Jensen (who is also co-CEO).7Greg Jensen, the 45-year-old co-CEO, oversees the research programs at the firm and came to the company as a Dartmouth College intern about 15 years earlier.6667Britt Harris, formerly of Verizon Investment Management, joined Bridgewater as co-CEO in November 2004 but left six months later. According to Dalio, the cultural fit was a problem, but Harris is a superstar, with an absolutely fabulous character.68From 2010 until early 2013, Bridgewaters general counsel wasJames Comey, formerUnited States Deputy Attorney GeneralandDirector of the Federal Bureau of Investigationfrom 2013 to 2017.69In 2016, Bridgewater had removed Greg Jensen as co-CEO and hiredJon Rubinsteininstead.45Rubinstein, a formerAppleexecutive, left Bridgewater after 10 months in early 2017. Within a few years, Rubinstein was the third top-level executive to leave Bridgewater Associates after spending less than 12 months on the job.70

In 2005, Dalio saw the firm taking on hundreds of new employees and decided to create a handbook calledPrincipleswhich was distributed to all employees. The publication is said to be part self-help book, part management manual, and part treatise on the mechanics of natural selection as they function in a business setting.32According to one trade journal, six years after the publication of Principles, the firms rapid expansion led to the institution of a bizarre culture of criticism.71The company acknowledges that employees often encounter culture shock when they begin working there, and Dalio admits: its not for everyone.32According to the companys web site, employees are encouraged to be assertive, and discussions about disagreements and mistakes are considered an intentional part of the companys culture because they are felt to stimulate both learning and progress.72

A 2011 article inNew York Magazinedescribed the company as the largest and indisputably weirdest hedge fund because of its unwavering commitment to total honesty and accountability and minute detail in its corporate culture.8For example, Dalio encourages employees to do whatever it takes to make the company great and emphasizes transparency and openness in its decision making processes.473All meetings are recorded and can be viewed by any employee as long as the meeting topic is not proprietary.71In addition, Dalio says that he fosters an extreme meritocracy of ideas and asserts that decisions are made about investments without considerations of hierarchy. He says that any employee can respectfully say anything to anyone in the firm, but they must be prepared to be challenged in return.6874The companys flat corporate structure aims to remove the barriers associated with traditional asset management firms, and qualities like stodginess and risk-aversion are discouraged.2875

The company has been likened to a cult,32but Dalio denies that and insists that the firm is a dedicated community.7An article in theNew YorkerbyJohn Cassidysays that the word cult clearly has connotations that dont apply to an enterprise staffed by highly paid employees who can quit at any moment. Cassidy says the company is located away from other financial institutions and headed by a strong-willed leader and that employees use a unique vocabulary.32One client, Bob Jacksha, chief executive officer of the New Mexico Educational Retirement Board, said of the firm: Every investment manager has its own culture [and] some are more unique than others.33

In 2016, an employee filed a complaint with the Connecticut Commission on Human Rights and Opportunities, saying that the hedge fund was like a cauldron of fear and intimidation..76The New York Times reported that several former employees recalled one video that Bridgewater showed to new employees that was of a confrontation several years ago between top executives including Mr. Dalio and a woman who was a manager at the time, who breaks down crying.77

Coordinates:411020N732146W / 41.17222N 73.36278W /41.17222; -73.36278

Williamson, Christine.Ray Dalio to step down from co-CEO role as part of shakeup at Bridgewater. Pensions & Investments

Kishan, Saijel (September 14, 2011).Hedge Funds Facing Succession Challenge as Kovner Hands Off Caxton to Law.

RANKED: The 10 biggest hedge funds in the US.

Bridgewater seeks competitive advantage through lateral thinking

Investment Legends: The Wisdom That Leads to Wealth

. John Wiley & Sons. pp.131148.ISBN

Celarier, Michelle; Lawrence Felefingne (July 2011).Ray Dalios Radical Truth.

Pursuing Self-Interest in Harmony With the Laws of the Universe and Contributing to Evolution is Universally Rewarded

David Snider; Chris Howard (February 16, 2010).

Money Makers: Inside the New World of Finance and Business

. Palgrave Macmillan. pp.224.ISBN

Teitelbaum, Richard (November 29, 2005).Bridgewaters Dalio Lures Pension Funds With 13.3 Percent Gains.

Williamson, Christine (February 4, 2008)Hedge Funds: Living largePensions&Investments. Retrieved March 26, 2010.

Wilton, Conn. Economist Dalio Foresees Greatest Crisis Since 29.

OKeefe, Brian (March 19, side the Worlds Biggest Hedge Fund.

Tietelbaum, Richard (November 29, 2005).Dalio lures pension funds.

Schlesinger, Jacob (September 26, 1996).U.S. Bonds To Be Tied To the CPI – Long-Awaited Project Will Be Sold Only In 10-Year Note Form.

. Archived fromthe originalon September 29, 2011

Bridgewater Associates Inc., a Connecticut money manager that participated in the Treasury discussions

Fromson, Brett D. (December 24, 1996) Washington Post, Treasury Delays Debut Of Inflation-Indexed Notes December 24, 1996

Schlesinger, Jacob and Zuckerman, Gregory (December 24, 1996)

Treasury Delays Sale of Bonds Tied to Inflation

Bridgewater Associates official web page. Retrieved October 28, 2011

Fromson, Brett D. (December 24, 2000).The TSC Streetside Chat: Ray Dalio of Bridgewater Associates.

2005 Investment Manager Operations Survey: Bridgewater Associates.

Williamson, Christine and Appell, Douglas (August 23, 2003)

Bridgewater adds liquidity to Pure Alpha clone

, January 24, 2006. Retrieved March 22, 2010.

, Money Management Letter, Retrieved March 22, 2010.

Recession? No, Its a D-process, and It Will Be Long

Corkery, Michael and Eder, Steve, June 22, 2011Bridgewater Goes LargeWall Street Journal, pg C1-C2

Dalios Quest to Outlive Himself, Bloomberg Markets, 10. August 2017

A Tough Audience Investment Workers? Pointed Questions Pierce McCain?s Stump Lines

Bridgewater and Strategic Investing, American Public Pensions are Becoming More InnovativeSWFI, February 26, 2012. Retrieved July 2014.

7th Annual Hedge Fund Industry Award Winners.

Kouwe, Zachery (2 September 2009).Bridgewater Leads in Investor Survey(DealBook). United States: New York Times. The New York Times Company

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Institutional Investor. Retrieved October 28, 2011

aiCIO 2011 Award WinnersaiCIO Announces 2011 Asset Management/Servicing Award Winnerst, September 26, 2011. Retrieved September 2011.

Tunick, Britt Erica (September 2011).Hedge Fund Report Card 2011

Dixon, Ken (23 May 2016).Republicans criticize Malloy over $22 M grant to Bridgewater. CTPost

Stevenson, Alexandra; Goldstein, Matthew (2016-07-17).Bridgewater, Worlds Biggest Hedge Fund, Is Said to Be Slowing Hiring.

Merced, Michael J. de la; Sorkin, Andrew Ross (2018-06-28).Bridgewater Plans to Become a Partnership as Ray Dalio Takes a Step Back.

Roose, Kevin (October 21, 2011).I Think I Did Everything Right.

Market Watch, Oct 22 2010, retrieved Oct 2011

Burton, Katherine.Paulsons $32 Billion Funds Prompt Too-Big Concerns. Bloomberg News

Appell, Douglas and Williamson, Christine (August 23, 2010)

Bridgewater adds liquidity to Pure Alpha clone

Invest Like a Fox… Not Like a Hedgehog: How You Can Earn Higher Returns With Less Risk

Appell, Douglas (3 October 2011).Risk-parity strategies drawing big interest despite bond worries.

Euromoney Institutional Investor;p Money Management Letter, Bridgewater Shapes Portfolio For Depression, Sara Behunek, April 20, 2009

Return of the Mega Launch(July 1, 2011) Institutional Investor, Retrieved August 2011

Inside the Crisis Larry Summers and the White House economic teamThe New Yorker, October 12, 2009. Accessed April 5, 2010.

MacEachern, Frank (June 27, 2014) Westport-Based Bridgewater Nixes Move to Stamford

Global bonds winner 2003: Bridgewater Associates

Murray, Eileen (Interview: Summer 2011)October 15, 2011, at theWayback MachineLeaders Magazine retrieved October 2011

David Snider; Chris Howard (February 16, 2010).

Money Makers: Inside the New World of Finance and Business

Comstock, Courtney (October 25, 2010).Ray Dalio Is Too Modest To Admit He Returned 38% YTD Using Transcendental Meditation. Business Insider.

Bridgewater Associates Truth Probings Are About to Get Turbo Charged

Dartmouth Student and Bridgewater Clash on Recruiting

A quick exit for Bridgewaters Harris Ex-Verizon Investment chief leaves alternatives firm after 5 months

AP Sources: Obama Preparing To Name Comey To FBI.

.AP. May 29, 2013. Archived fromthe originalon May 30, 2013

Stevenson, Alexandra; Goldstein, Matthew (2017-03-01).Bridgewater Associates, Worlds Biggest Hedge Fund, Shakes Up Leadership.

BridgewatersRay Dalio: Theres a Cultural Misunderstanding

Dalio, Ray.Bridgewater Associates: Culture and Principles,

Time to toughen up and embrace the joys of conflict

Taub, Stephen (June 28, 2011)Euromoney Institutional Investor,

Bridgewaters Alpha is up 11 Percent This Year

, June 28, 2011, Dalio also encourages subordinates to challenge their superiors, and expects every employee to express blunt honest opinions

Time to Toughen Up and Embrace the Joys of Conflict

At Worlds Largest Hedge Fund, Sex, Fear and Video Surveillance

At Worlds Largest Hedge Fund, Sex, Fear and Video Surveillance

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