Bridgewater assets down 18% in 2024 amid revamp

By Carolina Mandl

NEW YORK, March 31 (Reuters) - Bridgewater Associates' assets under management fell 18.1% in 2024 to $92.1 billion, according to a regulatory filing, as the hedge fund pursued a strategy to shrink the size of its flagship fund even as it posted a double-digit return.

The amount of money managed by Bridgewater, known as one of the world's biggest hedge funds, has dwindled in recent years. The firm had approximately $150 billion in assets in 2021, according to a statement about the launch of a new strategy four years ago.

Assets last year fell about $20 billion from 2023, according to the March 28 filing.

Bridgewater's management announced an overhaul of the business in 2023, restricting new inflows to the flagship fund Pure Alpha and later returning some of its assets under management to clients, as it believed a smaller pool of money would be better to explore trading opportunities.

The "goal is to be the best, not the biggest," a source familiar with the matter said, adding assets have grown in funds focused in Asia, including China, and in artificial intelligence, as the firm decided to diversify its investment products offering.

The vast majority of the asset contraction last year was due to the return of billions of dollars to clients, this person added.

Some investors have decided to redeem their money recently as the firm's performance has been bumpy, according to a separate source familiar with the matter.

The decline in assets came as Bridgewater's flagship fund Pure Alpha 18% volatility gained 11.3% last year, outperforming the industry.

The fund climbed an additional 8.7% this year through March 28, according to the first source, a sign it managed to profit from the beginning of a turbulent period for markets amid concerns about the new U.S. trade policies.

The recent performance is seen as an outcome of its overhaul, the first source said.

Global macro hedge funds such as Pure Alpha, which trade equities, bonds, currencies and commodities globally, were up 6.2% in 2024, according to an index by PivotalPath, with firms more exposed to equities exceeding double digits.

Still, the performance posted by Bridgewater's flagship fund has been volatile. In 2022 and 2023, Bridgewater underperformed its peers.

In 2023, CEO Nir Bar Dea launched an overhaul of the firm. It closed its flagship fund Pure Alpha to new inflows, and later decided to reduce its size to between $50 billion and $60 billion.

Pure Alpha ended last year where its management considers its size needed to be, at $61 billion, the first source said.

The idea behind it was that a smaller size would make the hedge fund more agile to explore market opportunities, helping performance.

Founded by billionaire Ray Dalio roughly 50 years ago, Connecticut-based Bridgewater has currently 175 investors, including pension funds, foundations and central banks, according to the filing.

Dalio gave up control of the firm he launched in 2022, when he also stepped down as a co-chief investment officer as part of a succession plan.

Since then, the firm has undergone a raft of changes, including the launch of a new fund focused on artificial intelligence and an exchange-traded fund in partnership with State Street Global Advisors. It has also opened an office in New York to attend the needs of some of its investment professionals, the first source added.