So You Want Bridgewater To Manage Your Money? There Is One Small Condition

Discussion in 'Wall St. News' started by stwh, Apr 17, 2015.

  1. stwh

    stwh

    THIS ARTICLE IS QUOTED FROM ZEROHEDGE.COM. THE LINK IS AS FOLLOWS: http://www.zerohedge.com/news/2015-...r-manage-your-money-there-one-small-condition
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    Submitted by Tyler Durden on 04/16/2015 16:35 -0400


    When it comes to the world's largest hedge funds, none is bigger than Bridgewater. Yes, some hedge funds may apply massive leverage to their AUM to boost their regulatory assets by orders of magnitude (such as Ben Bernanke's new employer Citadel has done for the past decade), but when stripping away all artificial bells and whistles, nobody can match Ray Dalio's behemoth, which launched in 1975 and which according to whose annual regulatory filing with the SEC, "Bridgewater’s assets under management increased from $150 billion as of 12/31/13 to approximately $154 billion as of 12/31/14."

    So, for whatever reason, say because you enjoyed listening to Ray Dalio talk about an imminent beautiful deleveraging, since utterly disproved and replaced with secular stagnation as the theme du jour, because you are impressed with the fund's 14% return YTD due to a huge bet against the EUR, because you want your money to be managed by a robot, or because you just have to be part of the biggest thing out there, you want to have Bridgewater manage your asset for you.

    Sure, no problem. there are a few small conditions one must satisfy...
    Bridgewater investors must be sophisticated investors who (i) can afford the risks associated with futures, commodities, currencies, options, forwards and other derivatives trading in fixed income and equity securities, and (ii) have sufficient knowledge and experience in financial and business matters to evaluate the risk of an investment in a fund or account managed by Bridgewater and determine its suitability.


    ... and one slightly bigger one:
    Bridgewater generally requires that its Clients have a minimum of $5 billion of investable assets. Generally, the minimum initial investment in a fund managed by Bridgewater is in accordance with the minimum fee requirement for that strategy, as detailed in Item 5.
    Oops. This is like the Groucho Marx joke about joining clubs... only in reverse.
    As for item 5?
    For new client relationships, Bridgewater’s standard minimum fee is expected to be $500,000 for its All Weather strategy, $1,000,000 for its Pure Alpha and Pure Alpha Major Markets strategies, and $4,750,000 for Optimal Portfolio. Bridgewater funds often invest in other Bridgewater funds. In such cases, there is no layering of fees.

    Yes, you read that right: some hedge funds use 500,000/1,000,000 as the minimum investable capital. Bridgewater, however, makes it clear in advance that that is the "minimum fee" you will be charged, irrelevant of how your assets perform subsequently.
     
  2. whats wrong with that. By the way, the detailed fees are nothing special given the minimum required investable assets of 5 bln most certainly imply at least a funding commitment of several tens if not hundreds of millions. the fee of 4,750,000 only represents 1% of an AUM of around 500mln. I am not sure why that is noteworthy...

     
  3. loyek590

    loyek590

    most rich people made their money in some other profession than managing money. They have a lot of money and no desire to learn how to manage it. They move in the same circles hedge fund manages move in, and they just give it to somebody they meet at parties or on yachts and golf courses. 2/20? They can't be bothered with what that means. Out perform under perform S&P? That is too much of a bother. All they know is Bridgewater manages my money and a lot of my friends money, and they are doing very well.
     
  4. dealmaker

    dealmaker


    Obviously their fee is what the market will bear perhaps even slightly below that level....