The place certainly was unusual. Dalio wanted to create an “idea meritocracy” and believed the best way to achieve it was through “radical truthfulness and radical transparency.” Open disagreement was encouraged, so-called baseball cards rated employees on attributes such as believability, and meetings were recorded.
When Dalio decided more than a decade ago to set Bridgewater’s succession in motion, “I was just running things,” he recalled. “We didn’t have a board or even an idea of how you establish good governance.”
Revolving Door
It proved to be much harder than he expected. Over the following decade, seven different people at various times held the title of sole or co-CEO.
Only in the past year did Bridgewater’s new ranks of leadership and governance finally come together. In December, the firm revealed the membership of its board. And in January, when David McCormick resigned to pursue a seat in the US Senate, it named Bar Dea and Mark Bertolini to succeed him as co-CEOs.
“It was a challenge along the way because Ray had strong views on how things should go,” said Greg Jensen, who joined Bridgewater as an intern in 1996, served as CEO in the early 2010s and is now co-CIO with Bob Prince.
At a hedge fund, lousy performance is often the catalyst for change. While rivals such as Brevan Howard Asset Management and Rokos Capital Management had record gains in 2020, Bridgewater’s Pure Alpha lost almost 13%. That was on top of comparatively poor returns in the 2010s.
Hints of Change
For a firm so confident that it had cultivated the best investing talent, the results were a shock. In the exhaustive review and analysis that followed, Bridgewater came to realize that several of its methods were constraining creativity and collaboration rather than surfacing the best ideas, according to Jensen.
“The goal is to get people to speak their mind,” he said. “Some of those tools worked to pull out the truth and some of them didn’t.”
As a result, the baseball cards, for example, no longer try to capture and predict every characteristic and quality in the effort to rate an employee’s input. The focus now is narrower and more practical, Jensen explained.
He also hinted at more changes to come. Now that control rests with the board, Bridgewater is likely to invest more aggressively in technology and in people -- even if Dalio objects, he said.