Bridgewater flagship fund up 9.9% in Q1, assets fell in 2024 amid revamp

By Carolina Mandl

NEW YORK, March 31 (Reuters) - Bridgewater Associates' flagship fund rose 9.9% in the first quarter, a source familiar with the matter said, even as the world's biggest hedge fund firm reported assets under management fell 18.1% last year after it downsized to better explore trading opportunities.

Bridgewater's Pure Alpha 18% Volatility Fund rose as markets gyrated over concerns about the Trump administration's trade policies. The fund gained 11.3% in 2024, outperforming the industry.

However, Bridgewater reported in a March 28 filing that assets in the Pure Alpha fund last year fell about $20 billion to $92.1 billion.

Bridgewater CEO Nir Bar Dea announced an overhaul in 2023, restricting new inflows to Pure Alpha and returning some assets to clients, noting that a smaller pool of money would allow it to better explore trading opportunities.

Assets shrank last year mostly due to the return of billions of dollars to clients, the source said, adding that management regards its recent performance as an outcome of the overhaul.

Pure Alpha had $72 billion in assets in January 2024 and ended 2024 at management's target of $61 billion, the source said.

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 offerings.

However, another source familiar with the fund said some investors also recently decided to redeem their money after the firm's bumpy performance over the last few years. Bridgewater had underperformed its peers in 2022 and 2023.

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

Assets managed by Bridgewater have dwindled in recent years, after reaching about $150 billion in 2021.

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

Dalio gave up control of the firm 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 address the needs of some of its investment professionals, the first source added.