Ray Dalio, 73-year-old American billionaire investor, was a hedge fund manager and co-chief investment officer (CIO) of Bridgewater Associates since 1985. He is viewed as one of the brightest minds in the investment world, and now he officially exits the fund.
Dalio’s exit and performance
The 73-year-old hedge fund manager initially revealed his decision in a Bloomberg interview, and then he followed up with a series of tweets to confirm his exit from a $150 billion fund. At the end of September, Dalio formally resigned from his position as a co-chief investment officer and his voting rights.
Today is a very special day for me and Bridgewater Associates because I transitioned my control of Bridgewater to the next generation and I feel great about the people and "machine" now in control. This transition moment is the culmination of a 47-year journey (1/11)
— Ray Dalio (@RayDalio) October 4, 2022
Dalio is well-known outside of the hedge fund community for his book “Principles,” which outlines his investment and management philosophy. However, he declared that he would continue to counsel the investment committee as well as the co-chief investment officers Bob Prince and Greg Jensen. So while many may see this as a retirement entry, he will still be around and serve as a crucial backbone of the fund.
Ray Dalio made, hands down, Bridgewater one of the greatest money managers in history, with total earnings to its investors of approximately $52 billion since 1975. Although the firm’s returns for 2021 were ‘only’ $5.7 billion on $99 billion in assets under management, these are astonishing numbers.
Bridgewater was initially launched in 1973, soon after Dalio finished Harvard Business School. He became popular for sending his ‘Daily Observations’ to clients, which led to his first remarkable investments. Dalio was among the first to foresee the credit crisis that would explode into the 2008 recession. Moreover, he has claimed this year that inflation plus Fed interest rate hikes will result in stagflation.
“You don’t often see a skilled hedge fund manager who can both build an enduring company and have the humility to let it go,” said Anthony Scaramucci, a fellow hedge fund manager.
In addition, Bridgewater benefited from opportune short positions in European markets as the impact of the Russia sanctions battered the EU economy. The popular creator of Bridgewater gave up his position as chairman and CEO in 2021 and 2017, respectively. Now he will focus more on the mentoring and guiding role in the company instead of a leading role.
After years of mediocre performance, Pure Alpha has outperformed the market this year by an astonishing 35%. However, Bridgewater’s main fund, known as All Weather since it is designed to generate consistent returns regardless of the market, is down 27% in 2022.
“I couldn’t be more joyous at the whole 47-year journey of my starting, building and now passing Bridgewater to people who I had meaningful work and meaningful relationships with,” Dalio said in his tweet.
The most meaningful relationships are achieved when you and others can speak openly to each other about everything that's important, learn together, and understand the need to hold each other accountable to be as excellent as you can be. #principleoftheday (1/3) pic.twitter.com/hw2wsegNhy
— Ray Dalio (@RayDalio) October 6, 2022