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As Omicron’s uncertainty grows, plans to return to the office are being revised again.

By on January 3, 2022 0

Bridgewater, the world’s largest hedge fund, appointed two new chief executives on Monday after David McCormick, the current chief executive, told employees he would step down to consider a candidacy for the U.S. Senate.

Nir Bar Dea, Deputy Managing Director of Bridgewater, and Mark Bertolini, Member of the Board of Directors of Bridgewater and former Managing Director of Aetna, will now jointly lead the hedge fund.

Mr. Bar Dea, 40, is relatively unknown to the investment world. He joined the Westport, Connecticut firm in 2015 and was elevated to No. 2 last February as part of a larger leadership reshuffle. A former major in the IDF, he was the pandemic planning architect for Bridgewater, which employs around 1,500 people and manages around $ 150 billion for pensions, sovereign wealth funds and other large investors. .

Mr Bertolini, 65, joined Bridgewater’s board of directors in 2019. He was Managing Director of Aetna, one of the country’s largest insurers, from 2010 to 2018, when CVS Health acquired Aetna for $ 69 billion.

Mr Bar Dea and Mr Bertolini are the most recent Co-Directors General of a cabinet which has become known for its unusual culture, the cornerstone of which is “radical transparency” in relations with colleagues. Employee conversations are often recorded for transparency; investment professionals who leave the company are subject to a strict two-year non-competition clause.

Employees are expected to follow – and are graded on their knowledge of – the Principles, a strict set of rules written by billionaire Bridgewater founder Ray Dalio, which has become a best-selling book. Mr Dalio’s writings, including his use of tools like meditation, have given him cult status within the investment community, but the structure he imposed on Bridgewater caused friction and led to frequent changes of direction.

Credit…Brendan Mcdermid / Reuters

Over the past decade, Mr. Dalio has held and left the position of Managing Director in succession planning; Bridgewater had at least three other general managers during this period, some of whom worked jointly. Mr McCormick joined the firm in 2009 as chairman and became co-managing director in 2017 with Eileen Murray, who had held the position since 2009. Ms Murray left Bridgewater in April 2020, leaving Mr McCormick, 56, sole leader.

Having two CEOs is usually detrimental to a company’s performance, but the structure can work if power is clearly delineated, said Lindy Green, associate professor of management and organizations at the Ross School of Business at the University of the Michigan, who conducted research on CEOs

“On paper, they appear to be a complementary duo,” Ms Ross said of the people appointed by Bridgewater, noting that Mr Bar Dea has in-house expertise and Mr Bertolini is more likely to be the public cadre.

In a note to staff sent on Monday, senior executives at Bridgewater, including Mr Dalio, who is one of the three co-investment directors and co-chairman, praised Mr Bar Dea’s background with the company, and of Mr. Bertolini as a seasoned global leader. Executives also thanked Mr McCormick for training a new generation of leaders, boasting that Bridgewater is now “largely immune to key person risk” – business jargon refers to when a company’s success is depends only on one or more leaders.

Mr. Bar Dea and Mr. Bertolini will inherit the most senior position in a company that did not experience any major changes under their predecessor. Assets under management have remained relatively stable for most of Mr. McCormick’s tenure, and Bridgewater continues to focus primarily on two investment strategies through its Pure Alpha and All Weather funds.

When Mr Cormick, a former Army captain and McKinsey consultant, joined Bridgewater as chairman in 2009, Mr Dalio told him he only had a “50-50 chance” of success, according to an e – farewell email sent by Mr. McCormick to Bridgewater employees on Monday. He held his own by becoming co-CEO in 2017 – the fifth person to hold the position in less than two years.

His tenure has been the subject of controversy. He and Mr Dalio argued privately over their views on China, a person familiar with the matter said. Mr Dalio, who has donated to Chinese philanthropic organizations and visited China numerous times over the years, was recently criticized for appearing to downplay the country’s human rights record. . Mr McCormick, a conservative Republican who is more critical of China and will continue to be so during the election campaign, according to someone familiar with his plans, disagreed with this approach.

Today, Bridgewater manages approximately $ 1.5 billion on behalf of Chinese investors. Its only other office outside of Connecticut is in Shanghai.

In 2020, Eileen Murray, who shared the managing director position with Mr McCormick for a time, sued Bridgewater for discrimination after she left, although the two sides have since resolved the dispute.

Credit…Rick Wilking / Reuters

Now Mr Bar Dea and Mr Bertolini will test their own chances in a joint first place.

Mr. Bar Dea joined the Bridgewater Research Department after obtaining his MBA from Wharton School. Prior to that, he served in the Israel Defense Forces from 2000 to 2007.

He rose through the ranks of the firm, leading its response to Covid. He was instrumental in the decision to have employees work outdoors in heated tents on the company’s Connecticut campus when it closed.

“The objective is quite noble and simple,” Mr. Bar Dea said of Bridgewater’s approach at a conference last year. “We are macro investors, which means that at the end of the day our goal is to seek to understand how the world works. “

The two haven’t proven themselves as managing directors of investment firms, but they may not have to focus on this aspect of the job anyway. Although Bridgewater recently announced that an internal operating board would take on additional responsibilities, its team of three investment directors, which includes Mr Dalio, 72, remains in place, suggesting that Bridgewater management is considering the investment aspects of its activities. as an area to be left largely alone.

Performance, however, has been spotty lately. Last year, as the broad stock market rose 27%, Pure Alpha, the company’s main fund, returned just 8.17% through December 29, and its annualized return over the course of the past decade is only 1.6%, according to someone familiar with the numbers. . All Weather, another leading Bridgewater fund, has fared better, generating nearly 11% gains in 2021 and an annualized return of over 10% over the past decade, the person added.

According to a partner, McCormick has focused more on the “macro” image during his tenure, overseeing client relationships and addressing general organizational issues. If he chooses to run for Senate seat from his home state of Pennsylvania, Mr McCormick will be one of the few Bridgewater alumni to do so. Unlike other financial firms, such as Goldman Sachs and the Carlyle Group, whose executives have become elected representatives of government, Bridgewater has generally not been a stepping stone for politicians.

Dozens of Bridgewater employees donated to President Joseph R. Biden Jr., including co-chief investment officer Greg Jensen, who donated $ 1 million to a political action committee that supported his presidential campaign .