WESTPORT, Conn. — Bridgewater Associates Inc. is morphing into a portable alpha-only manager and is pushing existing clients in more traditional strategies to join in the transformation.
Those clients unwilling to change most likely will be dropped.
Bridgewater, with $165 billion under management as of Sept. 30, closed its alpha-generating strategies to new investors earlier this year.
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.
Mr. Dalio stressed that Bridgewater is not taking a "hard and fast approach to this. It's an evolution. … We are encouraging our clients to move to the pure alpha approach. In some cases, we are maintaining mandates where the mandate is sufficiently diversified. But for some clients, we have given them stronger encouragement to move to our pure alpha approach. In some cases, clients with undiversified mandates have received notice that Bridgewater will resign in a year." He wouldn't identify those clients.