Bridgewater Associates founder Ray Dalio has announced his intent to step down from his managerial position at the investment management firm. According to the official announcement, which was posted on the LinkedIn networking site, Dalio currently serves as the firm’s co-chief executive officer. However, his “transition out of management” is expected to be complete by April 15.
Ray Dalio founded Bridgewater Associates in 1975. Over the next 42 years, the firm grew from a small operation headquartered in Dalio’s two-bedroom New York City apartment to the world’s largest hedge fund.
As reported by Business Insider, Ray Dalio credits his intensive hiring process and “radical transparency” formula for Bridgewater Associates’ unprecedented success.
In addition to requiring his associates to have a “high-level” education in business, prospective employees are required to take a series of personality tests and attend numerous interviews. Once hired, employees are expected to embrace Ray Dalio’s “radical transparency” system.
Bridgewater Associates’ radical transparency formula includes recording and filming all meetings and interviews and encouraging employees to openly criticize and critique their colleagues. Ray Dalio also requires all employees to study his “Principles” guide, which is described as the founder’s “management philosophy guide.”
As explained by Dalio, radical transparency “isn’t always easy, especially at first… ” However, he believes “dealing with these mistakes, problems, and weaknesses is what fuels [the firm’s] improvements.” In his opinion, the “unique culture” within Bridgewater “is the force behind [the firm’s] unique success over the last 40 years.”
As the world’s largest hedge fund, Bridgewater Associates has made an estimated $37 billion for its investors. Over the last four decades, the firm has also been honored with numerous awards, including “Manager of the Year” awards from “every major financial publication.”
Ray Dalio has also received a number of prestigious honors, including three “Lifetime Achievement” awards and being named one of Time Magazine’s “100 Most Influential People in the World.”
Although Ray Dalio has a reputation as a brilliant economist, and Bridgewater Associates has achieved great success, the firm has faced some controversy in recent years.
In 2016, a former Bridgewater employee filed a complaint with the National Labor Relations Board alleging that he was sexually harassed by his supervisor. The former employee also alleged that he was placed on administrative leave because he filed the initial complaint with the NLRB.
— Jonas Johnson (@Primingaction) March 1, 2017
As reported by Pension & Investments, the complaint was ultimately withdrawn, and the case was dismissed. However, NLRB spokeswoman Jessica Kahanek suggested a possible settlement between Bridgewater Associates and the NLRB. A specific settlement was not confirmed by either party.
More recently, Ray Dalio spoke out against President Donald Trump’s “populist policies.” As reported by Reuters, the Bridgewater Associates founder said the policies “could hurt the world economy.”
On March 1, Dalio announced he would begin transitioning out of his position as co-CEO. Although he will be stepping down from the managerial position by April 15, Ray said he loves his job and the company, and he will continue to serve as Bridgewater Associates’ co-CIO and co-chairman.
— David da Silva (@davidinvesting) March 1, 2017
According to the announcement, Jon Rubinstein, who was appointed co-CEO in May, will also be leaving the firm. The open CEO positions will be filled by Eileen Murray and Bridgewater Associates’ president David McCormick.
Despite the anticipated changes, Ray Dalio is confident that Bridgewater Associates is being run by a team of experienced and well-respected managers and associates who have proven success in the industry. Although he will step down as co-CEO, Dalio said he would remain active in the firm that he founded more than 40 years ago.
[Featured Image by Michel Euler/ AP Images]