Ray Dalio takes a step back. The famous investor, 73, has announced that he will step down as co-director of the BridgeWaters Fund, the largest hedge funds of the world. And that he has transferred all voting rights from him to the board of directors where he will continue as founder and mentor to his successor.
Dalio founded this hedge fund in 1973 and has managed to grow it into a giant, with a volume of assets under management worth 150,000 million dollars. The firm currently has 1,300 employees. What has made Dalio a multimillionaire, with an estimated wealth of close to 20,000 million dollars.
Hedge funds (known in jargon as hedge funds) are investment vehicles that have maximum freedom. They can concentrate their portfolio in a handful of companies, or take on a lot of debt, or buy assets with a lot of risk. These are products that are only available to professional investors. On the other hand, in conventional investment funds (known in Europe as Ucits funds), there are very strict rules on the degree of concentration or indebtedness that they can have. In Spain his figure was known for having made many bets on the fall of certain listed companies (the calls, short positions).
Ray Dalio is well known for having devised his own investment strategy, the so-called “any weather portfolio” (sometimesll weather portfolio), whose purpose is to create a permanent and stable portfolio over time. His strategy is based on the premise that, since the future is unpredictable, the markets have four clear phases (growth, recession, inflation, deflation) to each of which they assign a certain type of asset.
Bridgewater Associates delivered a 32% return for its flagship fund, during the first half of 2022, as it benefited from increased market volatility. The Pure Alpha II fund rose 4.8% in June, boosting annualized returns since its inception in 1991 to 11.4%, according to data released by the agency. Bloomberg.
Like many other macro funds, Bridgewater’s Pure Alpha strategy is rebounding after tough years, posting a decade-long annualized nominal gain before posting a return of around 8% in 2021. It had lost 12.6% on 2020, and several institutional clients withdrew their money.
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The legendary investor Ray Dalio retires after creating the largest hedge fund in the world