In a recent profile of Bridgewater Associates by AR Magazine, it’s noted that prospective employees must “take the Myers-Briggs personality test” and that “Bridgewater staffers…[go] through a rigorous screening process in which they are asked their views on such topics as abortion and God.” If we’ve learned one thing from the hedge fund’s guiding Principles, it’s that these questions don’t have a right or a wrong answer, per se. Rather, they are being posed to see if potential employees have the backbone to present and vigorously defend their ideas, which they will have to do on the regular as members of the staff. As there are presumably a great many of financial services employees out there who would kill for the opportunity to work at the fund, we’ve decided to do you a solid and conduct a mock interview session in which the abortion question comes up. Please note that we are not suggesting that Bridgewater is either pro-choice or pro-life. In fact, any answer is probably fine with them. Again, it’s how you lay it out that they care about. In this exercise, we’ll take the pro-life side. Feel free to use these responses verbatim. Read more »
Bridgewater Associates Determines Which Employees Opinions Are More Valuable Than Others Based On A “Believability Matrix”By Bess Levin
The latest issue of AR Magazine features a lengthy profile of Ray Dalio’s mega-successful Bridgewater Associates, with much space devoted to the “culture” of the firm, as defined by Principles, a handbook of sorts written by Dalio, which we shared last May. In sum, the firm requires its employees, 30 percent of whom leave within two years of being hired, to “trust in truth” and to “pursue the truth” relentlessly, in everything they do. Criticism is “both welcomed and encouraged” and rather than “depersonalizing mistakes” or saying “we didn’t handle this well,” the staff are told to “connect specific mistakes to specific people.” It’s an environment unlike any other hedge fund and those who’ve experienced the program firsthand seem to be divided into two camps, at least among those interviewed by AR**: Dalio and the Bridgewater officials (senior staff are referred to as “culture carriers”) who think it’s great and former employees who describe the place as “cultlike,” “sinister,” “eerie” and something out of George Orwell’s 1984. Here’s what one former exec had to say:
My fundamental belief is that Bridgewater is a cult. It’s isolated, it has a charismatic leader and it has its own dogma.” It was so stressful, he recalls, that one employee couldn’t sleep all night and then, in the morning, threw up before meetings with Dalio. (The incident could not be confirmed.)
Another likened being an employee at Bridgewater to being an abused puppy. Read more »
Our friends at Bridgewater Associates have long loved Halloween and a good Halloween soiree. In addition to an annual party paid for by the firm, its staff is known to host bunches of get-togethers in the week leading up to the big night, where everyone gets into the spirit. It wasn’t until very recently, however, that they felt comfortable speaking frankly about candy corn and costumes with the outside world. Read more »
In the thirty-five years since its founding, Ray Dalio’s Bridgewater Associates has done quite well for itself, posting the sort of returns clients appreciate. To that end, the firm’s Pure Alpha Strategy was up 31% for the year through August and, according to a Bridgewater spokeswoman, has “outperformed the market over the last three years by more than 70 percent.”
How do they do it? Are they role-playing hyena and wildebeest again? Is the market the wildebeest in this scenario? As B-Water’s ability to make it rain does not appear to be covered in the firm’s handbook, co-chief investment officer helpfully broke it down today.
The short version: “Either we are of average intelligence and everyone else in the industry is an idiot or we are fucking geniuses and make people of marginally respectable intelligence (you) look like morons. Take your pick.”
The long version: Read more »
Hedge Fund Investors Want Steve Cohen To Pull Back His Kimono, Think Ken Griffin Doesn’t Care About ThemBy Bess Levin
For its September issue, Absolute Return is running a “hedge fund report card.” The magazine polled hundreds of investors, asking them to rate their respective funds based on factors that included alignment of interests, alpha generation, independent oversight, infrastructure, transparency and liquidity terms. The results put York Capital at number one, followed by Bridgewater Associates, Bain’s Brookside Capital, Adage Capital and Cayon Capital overall. Bringing up the rear were SAC Capital, TPG-Axon, QVT Financial, Citadel and Cerberus Capital in dead last. In addition to asking the investors to simply provide scores, AR also afforded them their opportunity to air their grievances. Let out what they’ve been holding in, etc. For instance, someone with Citadel apparently doesn’t think Ken Griffin treats his clients right, noting that KG “holds his investors somewhere between indifference and disdain.” Which doesn’t really seem that fair! Read more »
Hedge Fund Manager Steven Bell Unwittingly Gives Ray Dalio A Few Ideas For Updated Version Of “Principles” While Decrying “Megalomaniac’s” MethodsBy Bess Levin
Silly little Brit. Read more »
Back in May, we published “Principles,” the unofficial employee handbook of Bridgewater Associates. Principles contain founder Ray Dalio’s musing on life, love, and how to run a successful hedge fund using brutal truth. For instance, if you want to tell someone they suck, you are more than welcome to. In fact, at Bridgewater, you are actively encouraged to do so (B-Water employees amass points for digs à la pieces of flair). But, you can’t do it behind their backs. You MUST tell someone they suck to their face and not just like a casual “You’re not so much my cup of tea” but a ass-tearing “YOU FUCKING BLOW,” and in many cases this conversation, in which you tell a colleague how you really feel, will be tape recorded and stored for the staff monthly movie night, or to review whenever anyone is feeling him/herself getting soft. If you are caught violating this or other any of the other rules three or more times you’ll likely be told to turn in your badge (everyone on staff wears a name-tag) and get off the property ASAP. So, it can be a bit of an adjustment for people not used to a place of such hardcore honesty. Some of them never get used to it and have told us as much. Others, once they get over the initial awkward phase, come to love it. And at least one has used the “Principles” to improve his marriage!
At first, Bridgewater trader Jon Hantler, a veteran of Deutsche Bank and Putnam Investments, had difficulty adjusting to the hyper-realism at Bridgewater, where colleagues openly critiqued his ideas and drilled into his weaknesses.
Yesterday we discussed Bridgewater Associates’ “Principles,” the meanderings of founder Ray Dalio, which serves as the hedge fund’s unofficial handbook. While clients probably have no problem with it, not everyone counts themselves as fans of the Tao of Dal, which includes operating “like a hyena, attacking the wildebeest,” “probing” ones colleagues and having their meetings taped all in an effort to get to the “truth.” Today Ray got in touch with us to a) clear up some perceived misconceptions, re the T of D, b) respond to the characterizations of the of the firm made by a friend of BA and c) provide an up to date copy of “Principles” (yesterday’s PDF was a draft from last fall), which you can use yourself, should you be interested in starting your own little B-water (they also make great stocking stuffers).
So, you’re going to work for Bridgewater, are you? Contrary to what various know-nothings will tell you, our nation’s greatest hedge funds are not soulless, interchangeable institutions that you can just bounce through like a bunch of cheap whores. They are delicate flowers that need to be finessed if you wanna make it past day one. If you’re not familiar with what makes Hedge Fund A (where crotchless panties and a mastery of BJ skills are required) different and unique from Hedge Fund B (where failure to really get in touch with your feelings re: 1-stock funds is seriously frowned upon) and Hedge Fund C (where it’s ALL ABOUT THE CHICKEN), the various company policies can come as a shock. For instance, if you didn’t know anything about the Bridgewater’s Tao of Dalio, which requires all employees to “probe” their colleagues (boss’s included), you might find yourself asking “WTF is this shit?” What this shit– the Culture of the Probe– is, is the secret to B-water’s success, the tenets of which comprise “Principles,” the hedge fund’s unofficial handbook, written by founder Ray Dalio. Some people, who were not familiar with the “Principles” prior to joining team BW, would not count themselves as fans of the Tao of Dal.
Ray encourages employees to live by the “Principles” and everyone is encouraged to quote them and use them in the day to day goings on of the company. “Culture carriers,” as he likes to call them, are those that commit the 200+ principles to heart and quote them in meetings and emails. The principles are pretty cult-ish, as is the culture of the whole company. At one of our town halls he handed out personally signed copies of them to everyone. The firm castigates anyone who doesn’t worship Dalio.
Most management meetings and department meetings are recorded, both the business and tech side, as are individual quarterly reviews or any meeting at managements discretion. Often if a manager or Ray thinks something is worth educational value they will email out a meeting recording company wide, these usually involve the individual getting shredded publicly for the greater good of the company. An example would be like when former COO Hope Woodhouse was shredded in front of the management committee and the sessions were sent out to the company to learn from (she was brought to the point of crying in the recording). Everyone is encouraged to given open and honest feedback so meetings often resort to public shaming and the demolition of people. 360s end up being everyone’s chance to totally dig on and destroy other individuals and say whatever things all year you’ve hated about people, 90% of feedback received in 360s is negative.
From the outside people think it’s a nice wholesome principled place that wants to cut through the corporate BS but it’s anything but. Ray’s hyper realism (in “Principles”) is insane. Once you read it you’ll get the idea– it’s all about adherence and indoctrination.
But that’s just, like, his/her opinion. Some of my best friends love the Principles! Regardless, that’s not the point. The point is that because there will apparently will be a quiz on these bad boys, we should probably take a look see. Read more »
December and YTD performance:
SAC Capital International:
December 2009: 2.18%
Moore Global Investments:
December 2009: 3.6%
Paulson Advantage Ltd. :
December 2009: 0.23%
November performance numbers are in.
Citadel Kensington Global Strategies Fund Ltd.:
November 2009: 0.50%