Bridgewater Plans New All Weather Fund, Sells Stake

Feb 5 2013 | 2:36am ET

The world's largest hedge fund will launch a new vehicle this year as it plans to close its only remaining fund open to new capital.

Bridgewater Investors said it would close its $65 billion All Weather Fund this year and launch a new version of the strategy, All Weather Major Markets. The new fund will differ from the old fund much as Bridgewater's last fund, Pure Alpha Major Markets, differs from its flagship Pure Alpha strategy, in that it will trade in fewer markets.

The closure of All Weather along with the launch of the new fund is designed to ensure All Weather's size does not hinder its returns, The Wall Street Journal reports. All Weather rose 15.3% before fees last year.

Bridgewater announced the plans in a 300-page report sent to investors late last year. It is unclear if the new fund, like Pure Alpha Major Markets, which closed to new capital early last year, will be open only to existing investors.

The $141 billion Westport, Conn.-based firm also said that it had sold another passive minority stake, part of its succession plan, cutting founder Ray Dalio's stake in Bridgewater while leaving the firm in control of its employees. Bridgewater did not identify the new minority owner, who joins three others, including the Teacher Retirement System of Texas and the Ontario Municipal Employees Retirement System.

"The proceeds of these transactions have allowed us to create a sustainable capital base that is independent of Ray, while remaining entirely employee-controlled," Bridgewater wrote in the report.

The report also bemoaned Pure Alpha's "mediocre performance;" the flagship rose between 0.6% and 0.8% last year, while the $15.6 billion Major Markets version gained between 4.6% and 6.9%. Bridgewater blamed "relatively small position sizing" and "a subpar winning percentage on the bets we made."

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