Ray Dalio‘s Bridgewater is approaching $100 billion AUM.
The fund is up 11% in 2011, while many other big hedge funds are struggling.
While there’s no doubt that Dalio is a sensational stockpicker, he says there are two people without whom he won’t make a trade, and all three share the title of co-Chief Investment Officer.
Unless Dalio, his Greg Jensen and Bob Prince “agree that a certain trade makes sense, the firm doesn’t make it,” according to the New Yorker, which has just published a huge profile on the Bridgewater chief.
While Jensen joined Bridgewater in 1996, Prince has been with the hedge fund since 1986.
Prince earned a degree in Finance and Accounting from the University of Tulsa, where he also earned an MBA. After college he went to work for the National Bank of Tulsa.
Around the same time, Dalio began sendng out his economic newsletter. Prince, then a financial analyst, was one of his enthusiastic readers.
According to the New Yorker,
Prince showed one of Dalio’s articles to his boss, David Moffett, who went on to become the chief executive of Freddie Mac. “He said it was the best thing he had ever read on how the economy works,” Prince recalled.
Another of Dalio’s articles that stuck in Prince’s memory was titled “What Is a Jeweler?” It described a jeweller as basically an investor with a long position in gold and precious stones. If the market price of these commodities goes up, the jeweller makes money on his stock. If prices fall, he can lose out. To limit the risk, Dalio wrote that jewellers should purchase gold-futures contracts designed to rise in value when the price of gold falls.
Now at Bridgewater, Prince oversees “research and development of proprietary investment management models, designs client investment strategies and oversees the implementation of these strategies within client portfolios.”
On the firm’s investment strategy, Prince says that:
Once we understand how the machine works, we can decide how to make money from it. We are systemised, so it’s all programmed into a computer.
Fundamental global macro managers look at causal relationships, but they don’t look into the cause and the effect like we do, and they don’t use diversification, they have two or three themes. We want diversity, so we have a lot of betting strategies.
Outside of Work
Prince lives with his family in New Canaan, Connecticut. He belongs to the Silver Spring golf club, and has a handicap of 2.5. He also likes scuba diving.
With his wife Sharon, Prince founded the Grace Community Church of New Canaan, with three other families. The church is non-denominational, and currently has about 1,000 members. The Princes “currently lead the Grace Farms Project, a former 49-acre horse farm in New Canaan that will be used as a home for their church,” according to ApostlesNYC.