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Bridgewater’s chief says he has ‘rewired’ world’s largest hedge fund

Nir Bar Dea is seeking to restore firm’s investment performance as it moves on from founder Ray Dalio

Bridgewater Associates’ new chief executive Nir Bar Dea said he had overhauled the hedge fund after just a year in charge, in a bid to restore the firm’s investment performance and mark a break from founder Ray Dalio.

“Everything has to get rewired,” Bar Dea told the Financial Times. “It’s like taking a brain and a heart out of a human and then planting a new brain and a new heart.”

Bar Dea’s rise to the top of Bridgewater comes at a crucial time for the business. The Connecticut-based firm, founded by Dalio, will be 50 years old next year and has for years dominated the sector as both the largest and best-performing hedge fund in the world.

But cracks have started to show in recent years with a drawn-out succession plan, high staff turnover and underwhelming performance.

Bar Dea, a former military officer who ascended to the top after less than a decade at the firm, has lived through the short tenure of multiple chief executives as Bridgewater has struggled to move on from Dalio.

Bar Dea, who was appointed sole CEO in March 2023 after previously sharing the job with Mark Bertolini, now wants to make it clear: Bridgewater is in the hands of a new generation and its decade-long transition away from the man who built the firm into a $160bn behemoth is over.

“We’re proud of Ray being a part of our history,” he said. “But it’s also true that Ray is . . . his own person and has his own set of goals. He does a lot of things outside of Bridgewater and that’s great. We want that for him. And then we need our independence.”

Bridgewater was in 2022 superseded by Ken Griffin’s Citadel as the best-performing hedge fund of all time. The firm’s flagship Pure Alpha fund sustained big losses at the end of 2022, then recorded one of its worst-ever years in 2023, after heavy losses in the final quarter left it down 7.6 per cent after fees.

Bar Dea acknowledged to investors in a video shared with clients that returns at the flagship fund were “less than what our clients expect and less than what we expect of ourselves”.

With the handover now completed, Bar Dea has set about trying to address staff turnover and investment returns. The Pure Alpha fund has staged a rebound this year and is up about 20 per cent, according to people familiar with the matter.

While little is known about how Bridgewater makes money, it is known on Wall Street for its unorthodox culture, with Dalio’s gospel of “radical transparency” long serving as its guiding philosophy.

Its culture has contributed to high turnover: former Apple executive Jon Rubinstein resigned as co-CEO just 10 months into his role after being deemed not to be a “cultural fit”.

Bar Dea accepts that Bridgewater’s pursuit of what he calls “absolute truth” is not for everyone.

“People almost self-select themselves to be in a place that puts truth above everything else,” he said. Bar Dea has previously said that the firm’s success is based on the “core idea of a group of people that want to be excellent so much that they’re going to be living in a state of uncomfortableness”.

Still, the 42-year-old maintains that there are key ways in which Bridgewater’s culture has changed under his leadership.

Feedback is predominantly given by junior employees to more senior ones, which is a “day and night change” from when he joined — back then “the flow of that feedback [was] almost entirely going from the top down”, he said.

Bar Dea hopes that Bridgewater’s pursuit of “absolute truth” will deliver market-beating performance for the hedge fund’s investors.

As part of a plan to make the fund more nimble during big market swings, Bar Dea has pledged to shrink the flagship fund by capping assets and returning money to investors. Pure Alpha’s assets will drop from $80bn to between $50bn and $60bn.

“We want to be the best, not the biggest,” said Bar Dea, who cut 100 jobs last year.

Bar Dea is focusing on two areas to reinvigorate performance. One is the funds, including Pure Alpha and All Weather, while the second is referred to internally as “portfolio solutions”, where Bridgewater works with clients to come up with new strategies that can improve their returns.

“We’re thinking about their biggest problems and creating solutions that honestly change their lives and add impact to the world,” said Bar Dea.

As part of the initiative, Bridgewater has been working on a macro fund that uses artificial intelligence, including large language models from companies such as OpenAI and Anthropic, to help it make investments.

Greg Jensen, one of three co-chief investment officers at the firm, who is leading the initiative, called it “unquestionably an experiment” at this point.

But Bar Dea described the fund as a first of its kind and said it would be one of the “biggest innovations [Bridgewater] has done over the years”.

Journey from industrial behemoth to takeover target reflects country’s decline as a mining powerhouse

A group of workers laid off from Anglo American sat drinking in the early morning sun outside a makeshift township bar in Ga-Puka, deep in South Africa’s platinum mining belt.

“The sad truth is that it’s us ordinary South Africans who are suffering. Government and the mine [shareholders] get rich, we are just thinking how we will survive,” said one, an engineering contractor, swigging from a can of beer.

The discovery in the 1920s of vast platinum reserves beneath the tranquil farmland north of Pretoria transformed the region. Today, job offers are scant for those relocated to the barren, sun-baked settlement of Ga-Puka.

While other platinum miners in the region have also slashed jobs, Anglo American Platinum, along with the LSE-listed miner’s iron ore unit Kumba, have come under the spotlight after BHP’s £31bn offer last month. The Australian miner’s unsolicited bid was conditional on Anglo demerging its Johannesburg-listed divisions.

A sharp decline in platinum group metal prices, used in everything from medical equipment to diesel car exhausts, has contributed to a 45 per cent fall in Amplats’ shares in the past year, with rising costs leading to a headcount reduction by almost a fifth.

The downturn in the platinum metals markets has come as South Africa’s mining industry has been embattled by power outages and crumbling infrastructure after years of government under-investment. Anglo’s journey from a South African corporate wealth creator to prey for a rival miner reflects the country’s own decline as a mining powerhouse, as well as the rising risks of doing business in the country.

“You can’t get away from the fact that South Africa is a very onerous environment for big mining companies in which to invest, let alone explore new resources,” said Michael Cardo, author of Harry Oppenheimer: Diamonds, Gold and Dynasty, a biography of the son of Anglo’s founder who chaired Anglo for 25 years.

“What’s under way now almost has the feeling of the sun setting on a corporate empire.”

Foreign investors last year perceived South Africa to be in the bottom 10 — lower than Mali and Burkina Faso — out of 62 mining jurisdictions, according to a survey from Canadian think-tank Fraser Institute.

Delays by the government in setting up industry basics such as a mining cadastre — a public online map that lists available mining or prospecting rights — have contributed to holding up a pipeline of projects, according to the Minerals Council.

Years of often violent wildcat strikes have also hastened the search for alternatives to platinum metals and exploration elsewhere.

“The government is the problem, and their only interest is in themselves,” said Joseph Mathunjwa, leader of a powerful platinum miners union, who has sought to translate clout in the shafts into political power by registering a new political party for elections this month.

Over a decade ago, Mathunjwa’s breakaway Association of Mineworkers and Construction Union, or AMCU, was at the forefront of organising militant strikes demanding fairer wages and better working conditions. That culminated in the 2012 Marikana massacre at Lonmin’s platinum mine, on the western platinum belt, when police acting on government orders summoned four mortuary vans before opening fire on the miners and killing 34 of them.

“I think many mining companies just look at the politics here, see how there are so many stumbling blocks in the way, and just don’t want to own assets in South Africa. It is just very messy to run assets here,” said Peter Major, director at Mining for Modern Corporate Solutions.

Anglo was the heart of industry which transformed South Africa from a colonial backwater to the world’s biggest diamond and gold producer, laying the foundations for Africa’s most industrialised economy.

The company started off in 1917 after Ernest Oppenheimer, a German-born diamond trader, raised £1mn to found the Anglo-American Corporation to mine gold around Johannesburg. The gold fields were among a steady stream of South African asset sales, but the company remains a sprawling international business spanning coveted copper mines in Peru and Chile.

In its birthplace, it has long had to navigate a fraught relationship with the governing African National Congress.

“Anglo American in its heyday was a behemoth, which was of concern to the ANC government,” said Gary Ralfe, whose 40-year career at Anglo included tenure as chief executive of De Beers.

A decade ago, Thabo Mbeki, president at the time, reacted angrily to comments by Anglo CEO Tony Trahar that operating in South Africa came with political risk. Mbeki fired back that Anglo had been built on the labour of the “poor and the despised . . . during the years of white minority rule”. 

A move to the London Stock Exchange in 1999 hurt investor sentiment and had lasting real-world consequences for South Africa, too. “There was an enormous repository of intellectual capital built up locally and in mines throughout southern Africa, which . . . to a considerable extent dissipated,” said Ralfe.

This month, mines minister Gwede Mantashe echoed Mbeki’s anger in response to the proposed break-up of Anglo, saying it “was born and grew here, out of our cheap labour . . . so you can’t want Anglo and not want South Africa.”

BHP backpedalled with a statement that the Australian miner’s proposal to exit Anglo’s remaining South African assets was not a negative reflection on the country. Mantashe told The Financial Time that his own view of the Australian miner remained “negative.” 

Despite a series of critical mis-steps which encouraged BHP’s offer, Anglo remains a leading private employer and investor in the country.

The miner has poured more than $6bn into South Africa in the past five years, invested heavily in renewables projects and been a driving force in business efforts to work with President Cyril Ramaphosa’s government to fix the electricity and logistics crises.

Still, for an upcoming generation of South Africans, the mining sector already seems to be in the rear-view window. The industry accounts for just over 6 per cent of total GDP compared to the 1980s, when its contribution was about a fifth.

On a sunny Monday afternoon in Johannesburg’s downtown business district, few students streaming out of an imposing neoclassical building that today houses a business school for underprivileged youth, knew that the building had once been Anglo’s iconic headquarters.

“Anglo American? Was that a mining company?” asked 19-year-old Sinethemba Somana, turning to a friend in puzzlement.

The question would have been all but unthinkable when Anglo was a household name and occupied almost a dozen buildings whose faded signposts still crop up between pawnshops and dank taverns in the now-derelict business district.

“Was it gold mining?” asked another 22-year-old student whose own father had been a gold miner. “We’d never go into mining.”