Bridgewater is making headlines
I have been allocating capital to asset managers since the early 90s., investing with Bridgewater since 1993 and continuing to do so. Reading the recent news commentaries about Bridgewater does not surprise me. As far as I remember, it’s Bridgewater toughest year for their alpha engine, both in absolute terms and relative to the competition. Being the largest hedge fund manager in the industry, along with a founder who became an icon not only in the portfolio management industry but management in general, adds to the interest by the investment world of what is going on with Bridgewater.
Here are my observations:
Success is a product of the lessons learned from discoveries and mistakes. The longer the success, the more lessons have been learned. This is no different for any asset manager, and Bridgewater being at it the longest, has experienced many cycles of discoveries and mistakes. This current episode is another one in the journey of learning and discovery and perhaps a needed one, if I may say so.
Let’s step back to see the big picture of the industry we are talking about. This is an industry that is much more competitive than the Olympics - a quote from Ray Dalio himself. Here one needs to look at what Bridgewater brings to the table in the liquid asset management industry since the 90s: the world of data science with a deep understanding of fundamentals in motion along with a well-established and enduring corporate culture. This has given Bridgewater the tools to adapt to any environment and compound investor’s wealth over the long term.
Having seen the evolution of the asset management industry, the rise and fall of stars and transition within firms, I can tell you that Bridgewater comes the closest to getting it right.