The Double-Edged Sword of Über-Success

Ray Dalio, with the winship of his hedge fund Bridgewater, has acquired a mystique of mythic proportions over the last year or two.  And with this success, the assets under management have followed.

And that unfortunate thing that happens with all managers who get really big, really quickly, has started to happen to him.

Here’s a quick idea from a piece in Forbes about the wealthiest hedge fund managers in America:

The current king of the hedge fund industry, Ray Dalio, can be found in Westport Ct., where he lords over the world’s biggest hedge fund firm, Bridgewater Associates, with about $130 billion in assets. He scored spectacular returns in the 20% range last year at a time when most other hedge funds struggled. Dalio’s net worth is $10 billion. He has not been able to keep his winning streak going so far in 2012, with one of his most prominent funds down by nearly 3% through the first half of the year. Now at age 63, Dalio is ceding more responsibility and selling ownership stakes in his firm to his employees and clients. Also on the drawing board: A new $750 million headquarters that if it gets regulatory approval will be built by 2017 in Stamford, Ct., to accommodate more than 2,000 employees, nearly double the number of people currently working at the firm.

This is not to say that it’s time to write Dalio off as an investment manager, but make no mistake – he is now more than just a manager.  He is now a hedge fund mogul, with all the trappings and pitfalls that come along with it.  It is interesting to note how this sort of thing becomes unavoidable, no matter who it happens to. The payrolls get bigger, there are more families depending on him to keep succeeding and obviously more investors.  Life gets harder, not easier, should he continue on in his current role.

Don’t get me wrong, I’d trade places with him in a moment 🙂


America’s Richest Hedge Fund Managers (Forbes)

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