Ray Dalio, founder of hedge fund Giant Bridgewater, sees more pain ahead

Ray Dalio founded Bridgewater Associates in his Manhattan apartment in 1975 and built it into a hedge fund colossus — with about $150 billion in assets — through astute analysis of macroeconomic trends. Along the way, he developed a set of principles later articulated in talks, tweets and books that helped shape the firm’s culture of “radical transparency” and turned Bridgewater into a “meritocracy of ideas.” Dalio recently turned over the reins of the Westport, Conn.-based firm to the next generation of leaders, but will remain a member of its operating board, an investor and a mentor to senior executives.

Dalio, 73, is stepping down at a time when Bridgewater’s flagship Pure Alpha fund is on the up — it has gained more than 22% this year through Oct. 31 — but the world is feeling weak. After years of loose monetary and fiscal policy and debt-fueled growth, many nations are struggling with rampant inflation, and central bankers are raising interest rates to cool price growth. Higher interest rates have in turn hit stock and bond markets and threaten to tip major economies into recession next year. Meanwhile, in the US, the population is highly polarized, while external conflicts between superpowers threaten to end decades of relative peace.

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