Bridgewater Associates runs the largest hedge fund in the world with holdings of $169 billion.
The Ray Dalio led fund just announced a big shake-up in its executive ranks.
The Westport, Connecticut-based hedge fund has hired former Apple executive Jon Rubinstein as co-CEO.
Rubinstein will replace Greg Jensen in that role.
Jensen, who has been with the fund for the last two decades, will remain as co-CIO.
Here’s the note sent to clients:
As you know, we are always in the process of figuring out the best way to handle things. For a number of years, we have been transitioning from an entrepreneurial firm run by its founder to an institution run by many capable people. We refer to this as our “management transition” because Ray is continuing in his responsibilities on the investment side of the business.
For the most part, though not exclusively, this management transition has been gradual and undertaken by the same group of people who have been at Bridgewater since the process began in 2010. These changes include transfers of both management responsibilities and equity ownership from Ray to the next generation of Bridgewater leaders. Our plan is to complete these shifts in four or five years.
How Bridgewater is Run and How the Transition is Being Managed
We have a partnership management model comprised of a Management Committee led by co-CEOs (currently Eileen Murray and Greg Jensen) and a Stakeholders Committee overseen by co-executive chairmen (currently Ray and Craig Mundie). Craig joined us about two years ago after being Chief Research and Strategy Officer at Microsoft, where he was for 22 years.
The Management Committee is comprised of our three co-CIOs (Ray, Bob Prince, and Greg) as well as Eileen, David McCormick, and Osman Nalbantoglu. Eileen, who oversees a significant portion of our operations, had a distinguished career on Wall Street prior to joining Bridgewater in 2009. David, who joined Bridgewater at about the same time as Eileen after serving as Under Secretary of Treasury with Hank Paulson during the financial crisis, leads our client organization and engagement with key clients and policymakers around the world. Osman, who joined Bridgewater in 2008 as a partner from McKinsey, oversees our account management and trading departments. This team is the group responsible for managing Bridgewater.
The Stakeholders Committee is essentially Bridgewater’s board of directors in that it represents Bridgewater stakeholders and is responsible for ensuring that management is operating excellently. In addition to Ray and Craig Mundie, it includes, Bob Prince (who has been at Bridgewater for 30 years), Greg Jensen (who has been at Bridgewater for 20 years) Giselle Wagner (who has worked with Bridgewater for almost 30 years), Randal Sandler (over 20 years), and Dan Bernstein (almost 30 years).
Consistent with how Bridgewater has operated for many years, this partnership relies on merit-based decision making to govern the firm. The primary responsibility for management lies with the CEOs (and the Management Committee) and the primary responsibility for assessing the CEOs and management resides with the Chairmen (and the Stakeholders Committee). All senior management issues and disputes are resolved by these people.
That is our governance structure which has evolved since we started the management transition six years ago. And, of course, which people are in what roles also continues to change as we learn about the management team and about our changing requirements.
One of the things that we have learned over the last six years is that it is probably too much for the CIOs to also serve as CEOs. The company had grown up with Ray leading both investment management (as CIO) and company management (as CEO)-and Greg had a similar set of responsibilities. However, as Bridgewater has evolved from a boutique to an institution, the company has become too large for anyone to oversee with such split attentions. While currently Greg is a co-CEO (with Eileen) and a co-CIO (with Ray and Bob), we have concluded that in order to have pervasive excellent management, we need CEOs who can give their full attention to the company’s management, and we want Greg to shift his full attentions to investment responsibilities. Also, because technology is so important to us, we wanted one of our co-CEOs to be very strong in that area.
Jon Rubinstein Background
Recently we finalized an agreement with Jon Rubinstein to join Bridgewater as co-CEO later this year. Jon has helped launch some of the most influential computing products of our time. He worked closely with Steve Jobs for almost 16 years, first running hardware engineering at NeXT and then at Apple, where he was SVP of hardware engineering and later SVP of a new division for the iPod, a device he was instrumental in creating. He then became the driving force behind Palm’s smartphone devices, serving as Executive Chairman of the Board of Palm, Inc. from June 2007 and Chief Executive Officer and President from June 2009 until its acquisition by the Hewlett-Packard Company in 2010. More recently, Jon was SVP and General Manager, Palm Global Business Unit, and then SVP, Product Innovation, for the Personal Systems Group at HP. He currently sits on the board of directors at Amazon.com, Inc. and Qualcomm Incorporated and is a member of the National Academy of Engineering.
Technology is pervasively important at Bridgewater, especially since one of our major strategic initiatives in the coming years is to continue building out the systemized decision-making that has been so successful in our investment area and to extend it to our management as well. Jon’s track-record of building world class products will be a tremendous boost to the efforts we already have underway. We are thrilled to have him join us and bring his unique management and technology talents to our team.
Jon is expected to join us in May. Until then and perhaps for some time thereafter, Greg, Eileen, Ray and the other members of the Management Committee will continue to oversee the management of Bridgewater, though the exact timing and responsibilities have yet to be worked out.