Bridgewater Associates is one of the most successful hedge funds in the world

Bridgewater Associates is one of the most successful hedge funds in the world

Bridgewater Associate is a brainchild of Ray Dalio

Success of one of the main hedge funds of the planet Bridgewater Associates is directly connected with its founder, i.e. the American billionaire Ray Dalio.

Ray Dalio is a Master of Business Administration (Harvard Business School). He founded his business at the age of 26 years. According to Forbes, the wealth of a businessman in April 2018 was USD 17.7 bln. Dalio is known for the fact that the capital of Ray Dalio has never gone down during 8 years.

In 1972, Ray was appoint on the position of the assistant at the New York Stock Exchange, where he previously tried to trade in oil futures. Soon he progressed up the career ladder to the team leader. After trying himself as a hired director, Dalio decided to create his own investment fund Bridgewater Associates in 1975. The future billionaire lured customers from his previous job place. Relatively soon, Dalio became famous as a specialist in futures trading, and he had more clients by far. For example, McDonald’s corporation tapped into the services of a young businessman. In 1985, Bridgewater got its first contract with the World Bank.

The investment strategy of Bridgewater Associate is called Global marco. To determine possible objects for investment, a variety of indicators are analyzed. Companies for investments are selected worldwide to diversify the portfolio. Thus, Bridgewater customers are practically free from currency risks and influence of external circumstances.

In general, the finance investment model is the following: the most important thing is government bonds. 55% of the total amount is invested in them. 75% of them fall within long-term securities, and the remaining 25% fall within mid-term ones. 30% of the amount are due to companies included in S&P 500 share index. It should be noted that there are half a thousand joint-stock organizations in S&P 500, therefore, a group of analysts is engaged in the distribution of money among worthy ones. 15% are spent on the portfolio diversification: investments in precious metals and raw materials. As noted earlier, Ray Dalio personally participates in the development of all proprietary investment strategies.

Bridgewater Associate: the crisis of 2008 and modern times

The peculiarity of the approach of hedge fund employees is the analysis of numerous macroeconomic indicators for balanced decisions making. In 2006, Bridgewater analysts predicted a downturn in the United States economy due to the cost of debt servicing and collapse of the real estate market.

Many companies suffered crushing losses in 2008 despite Dalio’s warnings. That year, Pure Alpha subsidiary increased revenue by 9.5%.

In 2011, many hedge funds lost an average of about 4%. Dalio company again showed how to work, having received profit of 23% for itself and its clients. Currently, Bridgewater is a leading company in the branch. In 2017, the total profit of the corporation exceeded USD 49.7 bln. In 2019, Ray took the 67th place of honor in the top of the richest people in the world according to Forbes magazine.