Bridgewater Associates is an outlier in the hedge fund industry – the size of the organization (1400 people), the assets under management ($150bn in investments), and the returns. The Westport Connecticut firm is known for its distinctive corporate culture so it is not a template or an exemplar for others on the investment side, but it may be in other ways.
In the annual Report Card ranking of hedge funds by II’s Alpha, Bridgewater came second overall out of 55 top firms with these rankings and scores across the criteria: Alpha Generation 4th (8.93 out of 10), Risk Management 2nd (9.21), Alignment of Interests 38th (6.86), Transparency 9th (7.86 out of 10), Infrastructure 3rd (9.36), Independent Oversight 12th (8.00), Liquidity Terms 1st (9.14) , and Investor Relations 3rd with a score of 8.79. The overview is that Bridgewater is rated very highly by US investors contributing to the survey (pension funds, endowments, foundations, funds of funds and other investors). In this survey the importance given to the non-investment factors is growing, as investors turn the screw on their hedge fund providers on the terms they offer.
The contributors to Alpha’s Hedge Fund Report Card are US institutional investors, and Bridgewater ranks very highly with them, though the macro mavens lost the very top spot last year to Adage Capital. “Investment & Pensions Europe” has a similar readership by type to II’s “Alpha”. The European pension fund part of the readership of IPE voted for the inaugural Pension Fund Perception Programme (PFPP) Awards for asset managers and voted Bridgewater Associates the winner.
For the IPE awards more than 180 managers were rated across nine overarching categories, and overall, and their clients also nominated those managers that they would recommend to other pension funds. The PFPP Awards commended the 25 managers who were recommended by 100% of their clients in the programme, the full list is given below.
Although some classify emerging market specialists Ashmore Investment Management as hedge fund firm because of the performance fees it charges, Bridgewater Associates is the only pure hedge fund management company with the quality to be commended by European pension funds to other pension funds. There were some very well regarded firms nominated in the process of declaring the winners in the IPE PFPP Awards – Franklin Templeton Investments, Majedie Asset Management and Baillie Gifford featured strongly, for example. In the “Investment & Pensions Europe” awards Bridgewater won none of the sub categories (value delivered, valuations and benchmarking, operations, ESG matters, investment management, risk management, reporting, and relationship management and client service) but in the overall assessment by clients Bridgewater Associates was the highest rated manager.
The II Alpha Report Card Ranking canvases opinion from different categories of investor, but is concerned only with hedge fund management firms and the survey respondents are mostly American. For Bridegewater to be a contender is a given at this stage. But for Bridgewater Associates to win amongst European investors, and beat high quality local and international competition of any type of investment management firm to be the highest rated manager is an outstanding achievement. Bridgewater Associates is the totemic firm of the hedge fund industry today.
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