(updated at 4:15 p.m. EST)
Texas Teacher Retirement System, Austin, has taken a stake in Bridgewater Associates, part of a 10-year plan by the manager to dilute the stake held by the company's founder, Raymond T. Dalio, president and co-chief investment officer.
Trustees of the $109 billion retirement system, after an executive session at Thursday's board meeting in Lubbock, approved a private investment of $250 million in Bridgewater that will provide the pension fund with a share of Bridgewater's profits, according to a webcast.
It is the second institutional investor client of Bridgewater to take a stake in the alternative investment manager.
Robert Prince, Bridgewater's co-CIO, declined to name the first institutional investor to make a private investment in Bridgewater or the size of that investment.
The size of the Texas Teachers' current investment in various Bridgewater strategies was not immediately available, Howard Goldman, a TRS spokesman, said in an interview.
Mr. Prince, who was in Lubbock on Thursday to present the company's proposal to the board of the teachers' fund, said in an interview that the company “very selectively” approached a small number of institutional investor clients about taking an equity stake in the firm.
Bridgewater is unlikely to seek more than the three institutional investors that have accepted Bridgewater's ownership offer, Mr. Prince stressed.
Mr. Prince said negotiations with a third institution, which he said he could not name, are close to being completed.
Mr. Prince declined to say how much in total financing Bridgewater is seeking from external client investors, but he noted that it will form “a capital base for the company” that will be used primarily for technology and other capital investments and liquidity purposes.
Mr. Dalio founded Bridgewater in 1975 “out of a two-bedroom apartment,” according to the firm's website. About four years ago, Mr. Dalio started a gradual process of reducing his own ownership stake of the company and decreasing his management responsibilities to concentrate more on “what he really loves — markets and managing money,” Mr. Prince said.
So far, Bridgewater has built out its management team and has been “evening out the company ownership” through an employee equity purchase program. The goal of the transition plan is to “build a company that is employee-owned and employee-controlled,” Mr. Prince added.
Mr. Prince declined to say what Mr. Dalio's company stake currently is or to provide other details about the firm's ownership.
