Bridgewater Associates, LP is an investment management firm with more than $15 billion in assets under management (AUM). It currently manages a total of 66 pooled investment vehicles, 36 of which are hedge funds. The firm currently employs 357 advisors.
It's important to understand that hedge funds are often complex, loosely regulated investments and therefore only accessible to accredited investors. If you're looking for trusted and comprehensive support in managing your own finances, consider speaking to a professional financial advisor.
Bridgewater Associates Background
Bridgewater started its investment operations in 1975 and initially provided consulting services in global markets. Currently, the firm's primary focus is institutional portfolio management. The firm also publishes a flagship research publication called The Bridgewater Daily Observations.
The firm has two direct owners: Bridgewater Associates Intermediate Holdings, LP (which is a general partner and limited partner of Bridgewater) and TrustCo LLC (a limited partner of Bridgewater). Intermediate Holdings is the only member of TrustCo; as a result, it is effectively the sole direct owner of the Bridgewater firm. The firm's headquarters are located in Westport, Connecticut.
The firm provides investment management services primarily to institutional clients, including but not limited to corporate and public pension funds, foreign governments and central banks, university endowments, charitable foundations, family offices, funds of funds and similar third party entities, as well as Union/Taft Hartley plans. It provides services through both managed accounts and commingled fund vehicles. The firm does not have any individual clients. It generally requires clients to have a minimum of $7.5 billion of investable assets.
Bridgewater Associates Investment Philosophy
Bridgewater has several strategies: Pure Alpha, Pure Alpha Major Markets, All Weather and Optimal Portfolio.
The firm has been managing its Pure Alpha strategy since 1991. This strategy is designed to generate the highest return-to-risk ratio possible through active management. The firm seeks to achieve this goal by trading a highly diversified set liquid global markets. This strategy is designed to work with a range of volatility and based on parameters of the clients' choosing. The strategy is based on 45 years of combined research into the fundamental drivers of global markets. Furthermore, the firm implements it through a systematic process. It believes that the strategy takes advantage of spreading risk across many diversifying trading strategies.
Alpha Major Markets is a global active investment strategy that the firm has been managing since 2010. It is designed to generate high return-to-risk ratio through active management while being unrelated to markets and other managers. Alpha Major Markets is an extension of the firm's Pure Alpha strategy.
All Weather is Bridgewater's optimal beta portfolio and it has been managing this since 1996. It offers what the firm believes is the highest ratio of return-to-risk for a strategic asset allocation.
Finally, the Optimal Portfolio combines Bridgewater's best understanding of both beta and alpha strategies into a total return portfolio. It is designed to produce a higher return-to-risk ratio and to maximize wealth overtime. (Generally, an alpha structure measures how a specific investment performs relative to its market. A beta structure reflects how much exposure an investment has to general market risk.)
Of course, all current and potential clients should be aware that no investment strategy can guarantee against risk of loss.
Largest Hedge Funds Managed by Bridgewater Associates
Bridgewater Pure Alpha Trading Company II, Ltd.
- AUM: $40,529,127,681
- Minimum: $10 million
- Beneficial Owners: 222
All Weather Portfolio Trading, LLC
- AUM: $36,831,567,971
- Minimum: $10 million
- Beneficial Owners: 94
Bridgewater All Weather Plus Fund, Ltd.
- AUM: $10,423,851,228
- Minimum: $10 million
- Beneficial Owners: 1
Bridgewater International Inflation-Linked Bond Fund Trading Company, Ltd.
- AUM: $7,973,545,833
- Minimum: $100,000
- Beneficial Owners: 9
All Weather@12% Trading, Ltd.
- AUM: $7,971,064,390
- Minimum: $10 million
- Beneficial Owners: 31
Fees at Bridgewater Associates
Fees at Bridgewater associates are negotiable. Individual arrangements are based on client-specific factors. Fees at the firm vary by strategy and may involve management fees (which are a percentage of assets under management), performance fees (which are a percentage of profits) or some combination of the two.
With regard to new client relationships, the firm's standard minimum fee is expected to be $500,000 for its All Weather strategy, $6 million for its Pure Alpha and Pure Alpha Major Markets strategies and $2.7 million for Optimal Portfolio. Bridgewater funds often invest in other Bridgewater funds, but there is no layering of fees.
Besides external investors, investments in Bridgewater funds may be made by certain employees and officers of the firm. These particular individuals generally will not be charged management fees or profit participation fees. However, they will be subject to the same rights and obligations as those of the other investors.
Beyond this, other additional fees and expenses may apply - including but not limited to registration fees, maintenance fees, certain taxes and regulatory expenses - so it is imperative that potential and existing clients read the offering documents carefully and reach out about specific fees charged to their fund.
What to Watch Out For
Again, it's important to understand that hedge funds are often complex, loosely regulated investments and therefore accessible only to accredited investors. Such investors differ from retail investors or individual investors, who might be taking a more DIY approach or enlisting the services of a financial advisor.
Within the past 10 years, Bridgewater Associates has not undergone any disciplinary or legal action deemed material to a client’s evaluation of its business integrity. That said, as an SEC-registered investment manager, the firm is legally obligated to uphold its fiduciary duty and work in clients’ best interests at all times. You can view its latest Form ADV on the official website of the Securities & Exchange Commission (SEC).
Becoming a Client of Bridgewater Associates
If you are an accredited investor and wish to become a client of Bridgewater Associates, you can visit the firm's website or call (203) 226-3030.
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