Bridgewater Plans Liquid Version Of Flagship Hedge Fund

Aug 23 2010 | 1:48pm ET

Bridgewater Associates has always kept the size of its Pure Alpha hedge fund strictly limited—indeed, the fund, which has been closed to new investors for four years, is actually returning money to investors to keep within its capacity constraints. But now the firm plans to experiment with a more liquid version of the tremendously successful strategy.

The Westport, Conn.-based firm, which manages $81 billion, is launching the new vehicle to give current investors in Pure Alpha an opportunity to reinvest the money the firm returns them in the same strategy without exceeding the existing fund’s capacity. But those who have been shut out of Pure Alpha for the last four years will remain shut out: The new strategy, despite investing in “markets that are not capacity constrained,” will be open only to current Pure Alpha investors, Pensions & Investments reports.

Pure Alpha Major Markets is “not a new strategy,” co-chief investment officer Robert Prince told P&I. “It is a limited extension of the capacity of existing Pure Alpha for existing clients. It [uses] the same indicators and markets, just moderately bigger trades in the bigger markets and no change in smaller ones.”

The $58 billion Pure Alpha fund is up about 20% this year. Prince said that clients would be allowed to split their investment between the two funds, and that client demand was not behind the decision to create the new fund.”

“We are not looking to raise assets and we are otherwise closed to new business,” Prince said. “This is a good way to create a limited accommodation to existing clients whose PA assets have risen as a result of good performance.”

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