Bridgewater May Be the Hottest Hedge Fund for Harvard Grads, but It’s Also the Weirdest

http://www.thedailybeast.com/articles/2013/03/07/bridgewater-may-be-the-hottest-hedge-fund-for-harvard-grads-but-it-s-also-the-weirdest.html

Bridgewater Associates is the $145 billion hedge fund elite college grads are clamoring to work for. Daniel Gross on the oddball firm's special sauce.

In the Northeast, spring is in the air, and at Ivy League schools, kids are planning their postgraduate futures. But this year, many of the smart young finance things who used to flood to positions at name-brand banks in lower Manhattan are casting their sights elsewhere. It's not a bank. It's not in New York. And it's not a century-old global institution with a patrician name.

It's Bridgewater Associates. Based in Westport, Connecticut, and founded and led by a person who is equal parts investing savant and shaman, Bridgewater might best be described as an alternative alternative asset-management company. It's the creation of Ray Dalio, who was memorably described in a great New Yorker profile by John Cassidy thusly: "He looked a bit like an aging member of a British progressive-rock group." Big shots like Stephen Schwarzman of Blackstone and Steven Cohen of SAC Capital may garner the headlines. But in recent years Dalio and Bridgewater have ridden new investment flows and superior performance to become America's largest hedge fund, with about $145 billion in assets.

Bridgewater, which has 1,300 employees, isn't for ex-jocks or day traders. Rather, it tends to attract—and look for—self-styled intellectuals and deep thinkers who like constructing arguments as much as they enjoy constructing portfolios. It's "the thinking Yalie's destination," as one recent Yale graduate put it. Undergrads at Harvard report that the scandal-free firm is more desirable than Goldman Sachs, previously the ne plus ultra for young grads on the make. "Bridgewater is very popular because it is one of the few hedge funds that will accept people right out of college," says a Harvard undergraduate who interviewed with the firm. "Also, the hours tend to be better. In investment banking you're working 100 hours a week, and at hedge funds it is more like 70." (This student may be overestimating the amount of time employees of both investment banks and hedge funds spend working).

Economist Joseph Schumpeter, who invented the phrase "creative destruction," analogized the upper strata of society as a hotel in which the guests are always checking in and out. That has been the case on Wall Street for the last many years. The list of blue-chip recruiters in 2006 would have included Lehman Brothers (bankrupt), Bear Stearns (essentially failed and merged into JPMorgan Chase), and Merrill Lynch (now a unit of Bank of America). The survivors—Goldman Sachs, JPMorgan Chase—are all shedding workers and bringing in smaller classes. Meanwhile, other companies have come up in the world. BlackRock, the bond giant, boasts more than $1 trillion in assets. Private-equity firms like the Blackstone Group and KKR, which weathered the storm, are continuing to transform from small partnerships into large institutions. They're hiring.

Then there's Bridgewater, whose workplace more closely resembles The Master than Wall Street; the trading day is like a long encounter session in which people learn about themselves, and then trade their way to prosperity.

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