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The Morning Brief: Big Changes at Bridgewater

In a shocking announcement, Raymond Dalio’s Bridgewater Associates announced a major shake-up of its management team. The world’s largest hedge fund firm told clients it recruited Jon Rubinstein to serve as a co-CEO beginning later this year. The engineer worked closely with Steve Jobs at NeXT and Apple and is credited with playing a major role in creating the iPod as well as Palm’s smartphone devices while serving as executive chairman of the board of Palm and chief executive officer and president until its acquisition by Hewlett-Packard in 2010.

At the same time, Bridgewater said Greg Jensen will relinquish his co-chief executive title, which he currently shares with Eileen Murray. He will retain his co-chief investment officer title along with Dalio and Robert Prince. “In order to have pervasive excellent management, we need CEOs who can give their full attention to the company’s management, and we want Greg to shift his full attentions to investment responsibilities,” Bridgewater’s letter states. “Also, because technology is so important to us, we wanted one of our co-CEOs to be very strong in that area.” It adds: “One of the things that we have learned over the last six years is that it is probably too much for the CIOs to also serve as CEOs.”

Of course, the announcement follows a high-profile controversy that played out last month when Jensen accused Dalio of not keeping to the firm’s succession plan. In the letter, Bridgewater says the transition process, which began in 2010, will be completed in four or five years, which will include the transfer of management responsibilities and equity ownership from Dalio “to the next generation of Bridgewater leaders.”

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Passport Capital nearly quadrupled its stake in Hortonworks to nearly 6.7 million shares, or 12.2 percent of the software company. The San Francisco hedge fund firm owned 3.7 percent of the shares at year-end.

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Blue Harbour Group cut its stake in Chico’s FAS by about 2.5 million shares, to 4.3 percent. As a result, the activist hedge fund headed by Cliff Robbins no longer needs to update its 13D filing when it sells additional shares of the specialty retailer. It made its initial filing on the stock in August 2013. The stock is down since Blue Harbour’s initial filing but it has surged about 30 percent since bottoming about one month ago, providing the Greenwich, Connecticut hedge fund a good opportunity to sell some shares.

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