Bridgewater takes portable alpha route, urges clients to follow suit

By: Christine Williamson, Pensions & Investments
Published: October 30, 2006
Talk about industry leadership.  According to Pensions & Investments, Bridgewater (manager of $165 billion) has sent letters to its clients saying that portable alpha strategies are such a no-brainer, that any client not buying in to the approach in the next 12 months will be, as P&I puts it, “resigned”.

“Raymond T. Dalio, founder, president and co-chief investment officer of the Westport, Conn., firm, said Bridgewater has been sending letters about the firm’s portable alpha focus to clients now using what he called ‘constrained’ or ‘undiversified’ mandates, which don’t permit Bridgewater to freely move among asset classes. Those letters not only encourage clients to move their assets to portable alpha approaches, but also contain very gently phrased notices that accounts of clients unwilling to make the transfer will be resigned within 12 months.”

Letter recipients reportedly included:

The San Francisco City & County Employees Retirement System; the $57 billion Pennsylvania Public School Employees’ Retirement System, and the $10 billion Ohio Police & Fire Pension Fund.

Like us at, CEO Ray Dalio believes alpha-centric investing represents a fundamental re-organization of the investment industry.

“Mr. Dalio said investor interest in portable alpha ‘is driven by the realization that you can get what you want by calibrating how much alpha you want in a portfolio, which you couldn’t control previously.’ He added the portable alpha approach ‘is fundamentally changing the investment industry, because the competition is for all the pieces of the pie.’

We will be keeping a seat warm in the “Portable Alpha Hall of Fame” for Bridgewater.

Read Full Article (courtesy: Pensions & Investments)

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