Bridgewater, World’s Largest Hedge Fund, Names New Chief Executives

The firm named deputy C.E.O. Nir Bar Dea and a board member, Mark Bertolini, to succeed David McCormick in light of Mr. McCormick’s political aspirations.

Bridgewater, the world’s biggest hedge fund, named two new chief executives on Monday after David McCormick, the current chief, told employees he would step down to consider a run for the U.S. Senate.

Nir Bar Dea, the deputy chief executive of Bridgewater, and Mark Bertolini, a Bridgewater board member and former chief executive of Aetna, will now lead the hedge fund jointly.

Mr. Bar Dea, 40, is relatively unknown in the investing world. He joined the Westport, Conn., firm in 2015 and was elevated to the No. 2 role last February as part of a broader leadership shake-up. A former major in the Israeli military, he has been an architect of pandemic planning for Bridgewater, which employs around 1,500 people and manages roughly $150 billion for pensions, sovereign wealth funds and other big investors.

Mr. Bertolini, 65, joined Bridgewater’s board in 2019. He served as chief executive of Aetna, one of the nation’s largest insurers, from 2010 through 2018 when CVS Health bought Aetna for $69 billion.

Mr. Bar Dea and Mr. Bertolini are the newest co-chief executives of a firm that has become known for its unusual culture, a cornerstone of which is “radical transparency” in dealing with colleagues. Employee conversations are often recorded for the sake of transparency; investment professionals who leave the firm are subject to a strict two-year noncompete agreement.

Employees are expected to follow — and are graded on their knowledge of — the Principles, a strict set of rules written by Bridgewater’s billionaire founder, Ray Dalio, that became a best-selling book. Mr. Dalio’s writings, including about his use of tools like meditation, granted him something like cult status within the investment community, but the structure he imposed on Bridgewater has caused friction and led to frequent leadership changes.

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Ray Dalio started Bridgewater in 1975 and remains one of its chief investment officers.Credit…Brendan Mcdermid/Reuters

In the past decade, Mr. Dalio has stepped in and out of the chief executive role as part of succession planning; Bridgewater has had at least three other chief executives in that time frame, some of whom served jointly. Mr. McCormick joined the firm in 2009 as its president and became co-chief executive in 2017 along with Eileen Murray, who had held the role since 2009. Ms. Murray left Bridgewater in April 2020, leaving Mr. McCormick, 56, as sole chief.

Having two chief executives is generally detrimental to a firm’s performance, but the structure can work if power is clearly delineated, said Lindy Green, an associate professor of management and organizations at the University of Michigan Ross School of Business, who has conducted research on joint C.E.O.s.

“On paper, they seem like a complementary duo,” Ms. Ross said of the Bridgewater appointees, noting that Mr. Bar Dea has internal expertise and Mr. Bertolini is more likely to be the public-facing executive.

In a memo to the staff sent on Monday, Bridgewater’s top executives, including Mr. Dalio, who is one of three co-chief investment officers and co-chairman, praised Mr. Bar Dea’s track record at the firm, and Mr. Bertolini’s as a seasoned global leader. The executives also thanked Mr. McCormick for grooming a new generation of leadership, boasting that Bridgewater is now “largely immune to key person risks” — business parlance for when a company’s success is uniquely dependent on one or more executives.

Mr. Bar Dea and Mr. Bertolini will inherit the top job at a firm that saw no major changes under their predecessor. Assets under management stayed relatively steady for most of Mr. McCormick’s tenure, and Bridgewater still focuses mostly on two investing strategies through its Pure Alpha and All Weather funds.

When Mr. Cormick, a former Army captain and McKinsey consultant, joined Bridgewater as president in 2009, Mr. Dalio told him he had only “50-50 odds” of succeeding, according to a farewell email Mr. McCormick sent to Bridgewater employees on Monday. He stuck it out, becoming co-chief executive in 2017 — the fifth person to hold that position in less than two years.

His tenure had some controversies. He and Mr. Dalio sparred privately over their outlooks on China, a person familiar with the matter said. Mr. Dalio, who has given to Chinese philanthropies and traveled to China numerous times over the years, recently took criticism for appearing to minimize the country’s record on human rights. Mr. McCormick, a conservative Republican who is more critical of China and will continue to be so on the campaign trail, according to someone with knowledge of his plans, disagreed with that approach.

Today, Bridgewater manages roughly $1.5 billion on behalf of Chinese investors. Its only other office outside of Connecticut is in Shanghai.

In 2020, Eileen Murray, who shared the chief executive role with Mr. McCormick for a time, sued Bridgewater for discrimination after she left, although the two sides have since resolved the dispute.

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David McCormick resigned from Bridgewater to consider running for a Pennsylvania U.S. Senate seat.Credit…Rick Wilking/Reuters

Now Mr. Bar Dea and Mr. Bertolini will test their own odds in a shared top spot.

Mr. Bar Dea joined Bridgewater’s research department after earning his M.B.A. from the Wharton School. Before that, he served in the Israeli Defense Forces from 2000 to 2007.

He shot up the ranks at the firm, directing its response to Covid. He was an instrumental part of the decision to have employees work outside in heated tents on the firm’s Connecticut campus when it was closed.

“The goal is pretty noble and simple,” Mr. Bar Dea said of Bridgewater’s approach at a conference last year. “We’re macro investors, which means that ultimately, at the end of the day, our goal is to seek an understanding of how the world works.”

Both men are unproven as investment-firm chief executives, but they might not have to focus on that aspect of the job anyway. Although Bridgewater recently announced that an internal operating board will adopt additional responsibilities, its three-person chief investment officer team, which includes the 72-year-old Mr. Dalio, remains in place — suggesting that Bridgewater’s leadership views the investing aspects of its business as an area to be left largely alone.

Performance, however, has been spotty of late. Last year, as the broad stock market rose 27 percent, Pure Alpha, the company’s main fund, returned just 8.17 percent through Dec. 29, and its annualized return over the last decade is just 1.6 percent, according to a person familiar with the figures. All Weather, another prominent Bridgewater fund, has fared better, generating nearly 11 percent gains in 2021 and an annualized return of more than 10 percent over the last decade, this person added.

Mr. McCormick focused more on the “macro” picture during his tenure, according to a business associate, overseeing client relationships and addressing broad organizational questions. If he does opt to run for the open Senate seat from his home state of Pennsylvania, Mr. McCormick will be a rare Bridgewater alumnus to do so. Unlike other financial firms, such as Goldman Sachs and the Carlyle Group, whose executives have gone on to become elected government officials, Bridgewater has not typically been a springboard for politicians.

Dozens of Bridgewater employees have donated to President Joseph R. Biden Jr., including co-chief investment officer Greg Jensen, who gave $1 million to a political action committee that supported his presidential campaign.

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