(Reuters) - Bridgewater Associates’ Ray Dalio acknowledged that his marquee hedge fund lost money during the coronavirus-led market turmoil following sharp reversals in stocks, bonds, commodities and credit, the Financial Times reported on Sunday.
Bridgewater, the largest hedge fund manager in the world at $160 billion, is trusted by large investors globally to help produce steady returns no matter what the market environment. Its Pure Alpha fund famously gained about 9.5% in 2008, when most investors were walloped by the financial crisis.
But this month, through the 12th, its flagship hedge fund, Pure Alpha II, declined roughly 13%, the FT reported here on Sunday, citing two people familiar with its performance. The fund is down about 20% for the year, the report added.
“We did not know how to navigate the virus and chose not to because we didn’t think we had an edge in trading it. So, we stayed in our positions and in retrospect we should have cut all risk,” the newspaper quoted Dalio as saying.
“We’re disappointed because we should have made money rather than lost money in this move the way we did in 2008.”
Pure Alpha was largely betting on rising equities and falling Treasury prices entering this month’s market shock, FT added, citing a source. However, the fund also held put options on stock indices, which helped cushion the losses, it added.
Bridgewater Associates did not immediately respond to Reuters’ request for comment outside regular business hours.
Reporting by Shubham Kalia in Bengaluru; Editing by Himani Sarkar