Bridgewater Associates, the hedge fund giant founded by Ray Dalio, suffered a 15% drop in assets under management during March and April in the wake of heavy losses at its flagship trading strategy.
Assets fell to $138 billion at the end of April from $163 billion at the end of February, according to a May 29 filing posted on the SEC’s website. Almost all of the decline reflects performance-related losses rather than client withdrawals, said a person with knowledge of the matter who requested anonymity because those details are confidential.
A spokeswoman for the Westport, Connecticut-based firm declined to comment.
Bridgewater got hit by the coronavirus at “the worst possible moment,” co-CIO Dalio wrote in mid-March, explaining that the firm had positioned its portfolios to profit from rising markets. Bridgewater Pure Alpha II, the firm’s largest fund, was down 20% through the first four months of this year.
Dalio in his note assured investors that the firm would provide them with “liquidity rather than prohibit” withdrawals. The firm, which offers monthly liquidity to clients, suffered several defections this year, including a decision by the Virginia Retirement System to pull $178 million from Bridgewater Pure Alpha II effective at the end of April, according to a notice on the pension plan’s website.
"It's now June and if you’ve been on a deserted island for the last five months you couldn’t have fathomed the movements we’ve seen," an expert says.
The person familiar with the matter characterized redemptions this year as modest and consistent with levels from previous periods.
The decline in assets has created capacity for Bridgewater to take in more money, the person familiar said. As a result, Bridgewater is accepting capital from people who have been on a waiting list and from existing clients who want to add to their investments.
The firm reopened its Pure Alpha strategy to new investors at the end of March for the first time since 2007. SkyBridge Capital, the fund of funds started by Anthony Scaramucci, told investors in May that it would allocate $100 million to Bridgewater.
