Bridgewater Associates was bound to be different once billionaire founder Ray Dalio no longer commanded the world's largest hedge fund. Very different, it turns out.
The overhaul began even before Mr. Dalio handed off control five months ago, with not-so-subtle tweaks to the infamously odd culture he nurtured. Now, the management team he left in charge, led by Chief Executive Officer Nir Bar Dea, is adopting an ambitious strategy to boost returns, increase profitability and develop new sources of revenue — in what amounts to the biggest shakeup in four decades.
Bridgewater is capping the size of its flagship funds, plowing more money and talent into artificial intelligence and machine learning, expanding in Asia and in equities and doubling down on sustainability. To pare costs and free up resources, it's also embarking on a firm-wide reorganization over the next two weeks, eliminating about 100 jobs in a workforce of roughly 1,300.
"Just doing what we've been doing isn't good enough," Mr. Bar Dea said in an interview. "Evolve or die. That's what's happening here."
This new direction for the $138 billion firm is partly the product of a leadership transition that began in 2020, when several years of underperformance and losses in the first year of the pandemic drove Bridgewater to establish an oversight committee for its investment decisions. Since then, the flagship Pure Alpha strategy has rebounded with a net annualized return of 10%, though many of its peers in so-called macro investing have fared far better.
The shifts also reflect an evolving landscape in the hedge fund industry, including the rise of multistrategy behemoths such as Citadel and Millennium Management, the boom in sustainable finance and the emergence of technologies such as generative AI and quantum computing.