Ray Dalio is stepping down from his co-chief executive role at Bridgewater Associates, the world’s largest hedge fund, while remaining co-chief investment officer and co-chairman in a leadership shake-up, according to a client note published today.
Dalio said in the note that he will stop managing Bridgewater by April 15. He had stepped into the role ten months ago to help Greg Jensen transition his co-CEO responsibilities. As part of the management changes, Bridgewater president David McCormick will join Eileen Murray as co-CEO. Jon Rubenstein, the former Apple executive who joined Bridgewater as co-CEO last year, will be leaving the firm because he wasn’t a “cultural fit,” Dalio said. Rubenstein will continue to advise the firm, though, and Dalio will remain co-CIO along with Bob Prince and Jensen.
Bridgewater didn’t immediately respond to a request for comment.
Bridgewater uses a “partnership model” with co-CEOs, co-CIOs and co-chairmen that reduces “key man risk” and allows the team to make independent assessments before working together to arrive at the best decisions for the hedge fund, according to the note. The Westport, Connecticut-based firm's culture is a “well-thought-out idea meritocracy,” according to Dalio, who founded the hedge fund in 1975. Bridgewater now manages about $160 billion in assets.
“Because consensus views are built into market prices, in order to beat the markets, we need independent thinkers,” the billionaire founder said in the note. “These independent thinkers need to have thoughtful disagreements and ways of resolving them.”
Dalio wrote that Bridgewater’s culture requires people to be “radically” transparent about their mistakes and weaknesses, as well as their strengths and talents.
“Doing this isn’t always easy, especially at first, but dealing with these mistakes, problems, and weaknesses is what fuels our improvements,” he said. “Some people love this forthright way of operating and wouldn't want to work anywhere else, while others dislike it and leave.”
In the note to clients, Bridgewater also announced that Carsten Stendevad, the former CEO of Danish pension fund ATP, is joining the hedge fund under its “Bridgewater Senior Fellowship Program,” which brings “distinguished individuals” into the firm for a year to explore its culture and share their expertise.
