Dalio Gives Up Running Bridgewater To Mentor The People Running It

Ray Dalio “no longer has the final word” at Bridgewater.

That’s a quote from co-Chief Executive Officer Nir Bar Dea, who spoke to Bloomberg for a piece marking the end of Dalio’s reign atop the world’s largest hedge fund, which he founded from his apartment nearly a half century ago.

Last week, Dalio transferred his voting rights to the board and stepped aside as one of the fund’s three co-CIOs. The transition was a long, arduous affair, a dozen years in the making. He called it “the natural progression” of things.

Bridgewater lagged some peers (and the broader market) during the early days of the pandemic boom, but 2022 has been kind to the Pure Alpha strategy, which was up almost 35% through Q3, building on a blockbuster first half.

In recent years, Dalio metamorphosed into a self-styled philosopher historian, to mixed results. Commercially, he’s a hit. His magnum opus, “Principles,” was a runaway success. To date, it’s sold more than four million copies globally, and has been translated into almost three-dozen languages. The tome found its way onto the coffee tables and into the social media posts of celebrities, athletes and moguls, some of whom Dalio now mentors.

“The principles that people live by are like the religion they’ve chosen for themselves to follow,” Dalio wrote last month. Bridgewater’s famously eccentric culture has long been likened to a religion and jokingly described as a cult.

With all due respect to the pantheon of hedge fund legends worshipped by too many market participants, Dalio stands apart. He has no peers, per se. That’s not to suggest he’s necessarily a “better” investor than any other legend. It’s just to say that he defies categorization. There’s an asterisk next to his name that references a footnote: “Not comparable.”

“Today is a very special day for me and Bridgewater Associates because I transitioned my control of Bridgewater to the next generation and I feel great about the people and ‘machine’ now in control,” he said Tuesday, adding that,

From my starting Bridgewater with two people helping me in my two-bedroom apartment to a multi-generation institution with 1,300 people that I’m helping. I can now visualize it doing great things for generations without me. That’s as good as it gets.

As far as how that Bridgewater machine looks to me which makes me optimistic, I see it in the hands of co-CIOs Bob Prince and Greg Jensen who were in it with me for over 35 years and 25 years, respectively, who are in charge of the investment part, co-CEOs Nir Bar Dea (who spent the better part of the last decade working with us in senior management) and Mark Bertolini (who has a wealth of experience) who are in charge of the business part, a large team of people who have great character, great capabilities and great devotion to Bridgewater who will support the co-CIOs and co-CEOs, a great board that will oversee them to make sure they do a great job, and an idea-meritocratic culture of meaningful work and meaningful relationships that is achieved through radical truthfulness and radical transparency.

“Radically transparent” to the end. That’s Ray.

He conceded that the painfully long succession planning “hasn’t been easy,” but came across as excited to see it complete: “We made it!”

“I didn’t want to hold on until I died,” Dalio explained, speaking to Bloomberg Tuesday. He retained a seat on the board, and created a new title for himself: CIO mentor.

As for how long he plans to be a mentor, Dalio said “hopefully until I die.” He intends to remain an investor and a board member at Bridgewater for a comparable period.