Bridgewater Associates

ASHWIN ANANTH, FREDERICO CARNIERO MIRA

GODINHO, JOSEPH CLARK, MICHAEL HASLETT,
JIANI HE, LANYU LIU, JINGHAN ZHANG
Agenda
Overview
History and Milestones
Products and Services
Strategies
Management Principles and Management Structure
Financial Performance
Future Plans
Conclusion
Overview
Worlds largest macro hedge fund
AUM: US$ 169 billion
Institutional Clients HQ: Westport, CT
Governments and Central Banks
Pension Funds
Endowments Univ. and charitable
Founder Ray Dalio
Innovative quantitative strategies
Unique management philosophy
Ray Dalio
History and Milestones
Founded by Ray Launched its
Dalio in his Turn to Money
Manhattan Management of All Weather
institutional fund Largest hedge
apartment
investors fund firm in

the world

1975 1980 1985 1991 1996 2006 2009 2014

Daily Launched its Founded the

Observations Pure Alpha Complete Bridgewater
Optimal Portfolio
fund focus on

alternative
strategies
Awards and Achievements
Global
Best Lifetime
Investor for Worlds Top
Performing Achievement
Excellence Hedge Fund
Global Bond Award
Global Bonds
Manager"

2000 2002 2003 2004 2006 2009 2011

Currency Industrys
Worlds Best Overlay Lifetime
Money Manager of Achievement
Manager the Year
 Products and Services
Pure Alpha (2 and 20 pricing) Pure Alpha Major Markets
Largest hedge fund launch at US $7.5 billion (2011)
Flagship fund
Alpha-based strategy, but higher liquidity using
Portable Alpha-based strategy
shorter-term debt

All Weather Daily Observations

Low fees, global portfolio First product offered
Primarily fixed income and currency Readers include: Barack Obama, International
positions Central Bank leaders
Seeks to match overall market return ()
 General Strategy
Ray Dalio Full agreement: Dalio, Jensen, and Price
Macro Economist who invests in Bonds Driven by rules-based framework
Doesnt trust one commodity or market
Keeps a spread across asset classes and countries
Consistent hitter of singles and doubles no big bets

Broadly: Illiquid positions / uncorrelated Focus on Buyers and Sellers

investments Macro approach to research
Decrease correlation by risk diversification, not
asset diversification
Pure Alpha Strategy
Pure Alpha fund
Portable Alpha strategy
Eliminating beta (market risk) across a portfolio of 30 to 40 positions

Active management with daily assessment and trades

Management Principles and
Management Structure
Management Principles:
Culture
Founders Basic Principles
Management Principles

Management Structure:
Horizontal structure
 Culture
Truth and excellence constant
improvement
Radical transparency
Assertive, open-minded, innovative
Basic Principles
Reality + Dreams + Determination = A Successful Life
Pain + Reflection = Progress
The quality of our lives depends on the quality of
the decisions we make
to work for yourself
to come up with independent opinions
to stress-test them
to be wary about being overconfident
to reflect on the consequences of your decisions
and constantly improve
Management Principles
Great culture + Great people

How to achieve
the goals Culture

Organizations are like individuals Organization is like a machineFeedback Loop

How they choose to approach these Produces outcomes
impediments determines hoe fast they Compare results to the goals
can move towards their goals. Assess and improve how it works
 Horizontal Corporate Structure
Well-trained workers will be more productive -- more directly involved in the
decision making process

Comments and feedback are more efficient

Has few or no levels of middle management between staff and executives

Aims to remove the barriers associated with traditional asset management

firms, and qualities like stodginess and risk-aversion are discouraged
Major Players
Market Share of Peers
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%

Source: IBISWorld
Financial Performance
Revenue (Billion)
4.5
4 3.9
3.5 3.5
3 3 3.1
2.7
2.5
2
1.6
1.5
1
0.5
0
2010 2011 2012 2013 2014 2015

Source: IBISWorld
Financial Performance
Assets (Billion)
120
110.4
100 99.7
84 87.1
80
76.1
60

45
40

20

0
2010 2011 2012 2013 2014 2015
Source: IBISWorld
Future Plans
Algorithm trading
Start the artificial-intelligence team
Thank you!
To make money in the markets, you have to think independently and
be humble. You have to be an independent thinker because you cant
make money agreeing with the consensus view, which is already
embedded in the price. Yet whenever youre betting against the
consensus, theres a significant probability youre going to be wrong,
so you have to be humble.

@RayDalio