Bridgewater chief Ray Dalio gets panned a lot for being, well, a little bit odd.
But now the haters have been zipped.
His whole transcendental-meditation-at-peace-with-the-world quirk is clearly working because the man just can stop making money.
His Pure Alpha II macro fund is the third-best performing hedge fund of 2010, with returns of 38%, according to Bloomberg Markets Magazine 100 Richest Hedge Funds list.
And even more impressively – in a $34 billion dollar fund.
Hence, profits for the fund are in excess of $2.25 billion according to Bloomberg Markets Magazine calculations. So for Dalio, who we’re guessing charges investors at least a 20% cut of profits (actual profits for the fund, in total, are about $12.9 billion – because, as one of our commenters pointed out, that is 38% of $34 billion), that’s probably about $2 billion in profits for him in just one fund. (He had two others in the top-performing categories, although Pure Alpha II is his biggest.)
And of course that makes him, far and away, the hedge fund manager with the best profits of the year. SAC’s International Fund pales in comparison, lumbering behind back in the $1 billion in profits category.
Where did the earnings come from?
According to Bloomberg Markets Magazine ,
The Pure Alpha funds made money betting against the U.S. economy, according to a person familiar with Bridgewater’s trading. Dalio and his managers bought U.S. Treasury bonds, which rallied as economic growth, which can produce inflation, remained anemic, the person said.
What makes this even more incredible is that the year before, Pure Alpha II returned only 2%.
And we’re not finished: Dalio has TWO other hedge funds in the top 15 performers for 2010: All Weather 12% Strategy came in at 11th with returns of 23.2% (it’s the third most profitable hedge fund in the world and made ~$428 million in 2010 according to Bloomberg Markets); Pure Alpha 12% came in at 15th with returns of 22.2%.
What does this mean? That for those not cracking the $1 billion in profits level – that is, pretty much everyone bar Dalio and Mr. Steve Cohen – your best bet for 2011 might be to turn up the Beatles, learn how to meditate and let your staffers party like they’re, well, a 2010 Bridgewater investor.
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