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Bridgewater Associates

ASHWIN ANANTH, FREDERICO CARNIERO MIRA
GODINHO, JOSEPH CLARK, MICHAEL HASLETT,
JIANI HE, LANYU LIU, JINGHAN ZHANG

Agenda Overview History and Milestones Products and Services Strategies Management Principles and Management Structure Financial Performance Future Plans Conclusion .

CT ◦ Governments and Central Banks ◦ Pension Funds ◦ Endowments – Univ. and charitable Founder Ray Dalio ◦ Innovative quantitative strategies ◦ Unique management philosophy Ray Dalio .Overview World’s largest macro hedge fund ◦ AUM: US$ 169 billion Institutional Clients HQ: Westport.

History and Milestones Founded by Ray Launched its Dalio in his Turn to Money Manhattan Management of All Weather institutional fund Largest hedge apartment investors fund firm in β the world 1975 1980 1985 1991 1996 2006 2009 2014 Daily Launched its Founded the Observations Pure Alpha Complete Bridgewater Optimal Portfolio fund focus on α alternative strategies .

Awards and Achievements “Global “Best “Lifetime Investor for “World’s Top Performing Achievement Excellence Hedge Fund” Global Bond Award” Global Bonds” Manager" 2000 2002 2003 2004 2006 2009 2011 “Currency “Industry’s “World’s Best Overlay Lifetime Money Manager of Achievement” Manager” the Year” .

5 billion (2011) ◦ Flagship fund ◦ Alpha-based strategy. but higher liquidity using ◦ Portable Alpha-based strategy shorter-term debt All Weather Daily Observations ◦ Low fees. global portfolio ◦ First product offered ◦ Primarily fixed income and currency ◦ Readers include: Barack Obama. International positions Central Bank leaders ◦ Seeks to match overall market return (β) . Products and Services Pure Alpha (2 and 20 pricing) Pure Alpha Major Markets ◦ Largest hedge fund launch at US $7.

and Price ◦ Macro Economist who invests in Bonds ◦ Driven by rules-based framework ◦ Doesn’t trust one commodity or market ◦ Keeps a spread across asset classes and countries ◦ Consistent hitter of singles and doubles – no big bets Broadly: Illiquid positions / uncorrelated Focus on Buyers and Sellers investments ◦ Macro approach to research ◦ Decrease correlation by risk diversification. General Strategy Ray Dalio Full agreement: Dalio. Jensen. not asset diversification .

Pure Alpha Strategy Pure Alpha fund ◦ Portable Alpha strategy ◦ Eliminating beta (market risk) across a portfolio of 30 to 40 positions ◦ Active management with daily assessment and trades .

Management Principles and Management Structure • Management Principles: • Culture • Founder’s Basic Principles • Management Principles • Management Structure: • Horizontal structure .

open-minded. innovative ◦ to work for yourself ◦ to come up with independent opinions ◦ to stress-test them ◦ to be wary about being overconfident ◦ to reflect on the consequences of your decisions and constantly improve . Culture Basic Principles ◦ Reality + Dreams + Determination = A Successful Life ◦ Truth and excellence  constant ◦ Pain + Reflection = Progress improvement ◦ The quality of our lives depends on the quality of ◦ “Radical transparency” the decisions we make ◦ Assertive.

• Assess and improve how it works .Management Principles • Great culture + Great people How to achieve the goals  Culture • Organizations are like individuals • Organization is like a machine—Feedback Loop • How they choose to approach these • Produces outcomes impediments determines hoe fast they • Compare results to the goals can move towards their goals.

Horizontal Corporate Structure ◦ Well-trained workers will be more productive -. and qualities like stodginess and risk-aversion are discouraged .more directly involved in the decision making process ◦ Comments and feedback are more efficient ◦ Has few or no levels of middle management between staff and executives ◦ Aims to remove the barriers associated with traditional asset management firms.

Major Players Market Share of Peers 6.00% 1.00% 2.00% 3.00% 0.00% Source: IBISWorld .00% 4.00% 5.

9 3.5 0 2010 2011 2012 2013 2014 2015 Source: IBISWorld .5 3.6 1.7 2.5 2 1.5 4 3.Financial Performance Revenue (Billion) 4.1 2.5 3 3 3.5 1 0.

Financial Performance Assets (Billion) 120 110.7 84 87.1 60 45 40 20 0 2010 2011 2012 2013 2014 2015 Source: IBISWorld .1 80 76.4 100 99.

Future Plans ◦ Algorithm trading ◦ Start the artificial-intelligence team .

Yet whenever you’re betting against the consensus.Thank you! To make money in the markets. there’s a significant probability you’re going to be wrong. which is already embedded in the price. you have to think independently and be humble. @RayDalio . You have to be an independent thinker because you can’t make money agreeing with the consensus view. so you have to be humble.