Tuesday, January 08, 2008

Ray Dalio in FT

If you stopped by FT Alphaville yesterday, you may have already seen mention of Financial Times' interview with hedge fund manager Ray Dalio, of Bridgewater Associates.

The full article is available at the link above (FT.com), and it is an interesting profile of one of the hedge fund world's most highly regarded figures. Here are a few excerpts from the piece:

"Mr Dalio, who founded his company, Bridgewater Associates, more than 30 years ago, is relentless in his pursuit of difference. He tracks his funds' correlations to the market and quickly tacks away whenever they appear to converge.

His singular view has shown results, propelling Bridgewater to become a highly regarded $150bn institutional manager as well as the third biggest hedge fund manager in the world. Bridgewater's hedge funds typically returned about 15 per cent a year, after fees, for the past 15 years. In 2007 the performance range was 9 to 11.2 per cent, net of fees, for its three hedge funds, a respectable showing in an environment where many big funds have faltered."

The article goes on to detail Dalio's views on investment performance, leverage, and the changing face of investment management.

"One thing he is certain about is the profound change that he says is taking place in the investing business as traditional asset classes are dissolving.

" "Investments were [once] in stocks and bonds and managers specialised in one or the other. An investment manager was different from a real estate owner, who was different from a private business owner. Now [almost] everything that earns money is securitised, often derivatives are created on them and the game is to make money by mixing them into optimally structured portfolios." "

You can see the full article online at the link above or in today's Financial Times print edition.