Bridgewater takes portable alpha route, urges clients to follow suit

30 October 2006

By: Christine Williamson, Pensions & Investments
Published: October 30, 2006
   
Talk about industry leadership.  According to Pensions & Investments, Bridgewater (manager of $165 billion) has sent letters to its clients saying that portable alpha strategies are such a no-brainer, that any client not buying in to the approach in the next 12 months will be, as P&I puts it, ”resigned”.

“Raymond T. Dalio, founder, president and co-chief investment officer of the Westport, Conn., firm, said Bridgewater has been sending letters about the firm’s portable alpha focus to clients now using what he called ‘constrained’ or ‘undiversified’ mandates, which don’t permit Bridgewater to freely move among asset classes. Those letters not only encourage clients to move their assets to portable alpha approaches, but also contain very gently phrased notices that accounts of clients unwilling to make the transfer will be resigned within 12 months.”

Letter recipients reportedly included:

The San Francisco City & County Employees Retirement System; the $57 billion Pennsylvania Public School Employees’ Retirement System, and the $10 billion Ohio Police & Fire Pension Fund.

Like us at AllAboutAlpha.com, CEO Ray Dalio believes alpha-centric investing represents a fundamental re-organization of the investment industry.

“Mr. Dalio said investor interest in portable alpha ‘is driven by the realization that you can get what you want by calibrating how much alpha you want in a portfolio, which you couldn’t control previously.’ He added the portable alpha approach ‘is fundamentally changing the investment industry, because the competition is for all the pieces of the pie.’”

We will be keeping a seat warm in the “Portable Alpha Hall of Fame” for Bridgewater.

Read Full Article (courtesy: Pensions & Investments)

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2 Responses to “Bridgewater takes portable alpha route, urges clients to follow suit”

1. All About Alpha » Blog Archives » The Whole Enchilada Says:
   January 26th, 2007 at 8:19 pm

   […] As regular readers may recall, Alpha Male was at a hedge fund conference last fall involving a large number of institutional investors.  While the “main stream media” was not invited, AllAboutAlpha.com was able to report on a few general themes and some of the extra-curricular events.  One of the speakers was Robert Zink of behemoth money manager Bridgewater Associates, managers of over $150 billion in AUM (and pioneers of alpha-centric investing).  He brought with him a very interesting message, but we ran out of space and time to report on it back in October.   […]

2. allaboutalpha.com: Welcome to AllAboutAlpha.com Says:
   June 17th, 2007 at 10:13 pm

   […] We used the term to describe Bridgewater Associates, one of firms on the vanguard of alpha-centric investing, when they asked their clients to switch to portable alpha last October: “Like us at AllAboutAlpha.com, CEO Ray Dalio believes alpha-centric investing represents a fundamental re-organization of the investment industry.”   […]