(Reuters) – Hong Kong/ShanghaiAccording to two sources and government data, Bridgewater has doubled its fund assets in China to more than 20 billion yuan ($2.93 billion) over the past year, solidifying its position as the largest international hedge fund in the country.
The increase was bolstered by Bridgewater China’s December product launch, which raised 2.7 billion yuan, according to the sources. This reinforced the appeal of billionaire founder and self-proclaimed Sinophile Ray Dalio and his “all weather” strategy in China.
Connecticut-based Three years after launching its first onshore China fund in 2018, Bridgewater’s assets under management (AUM) in China surpassed 10 billion yuan, propelling the business beyond Winton and Man Group to become the largest international hedge fund institution in China. The company’s leadership was further enhanced by its phenomenal growth last year.
Most foreign fund managers in China struggle to grow in the $10 trillion asset management industry, so Bridgewater’s business boom is unusual.
Peter Alexander, the managing director of the fund consulting firm Z-Ben Advisors, said that Bridgewater’s success disproves the idea that foreigners can’t compete in the United States.
“It’s just not true that China is very competitive or that certain things hold international businesses back from growing.”
According to Shanghai government data, Bridgewater’s onshore China funds surged to almost 19 billion yuan by early November.
According to two sources, it sold a series of feeder funds through China Merchants Bank in December, raising 2.7 billion yuan.
Bridgewater was unwilling to comment. The sources, who were acquainted with the situation, requested anonymity because they are not authorised to speak to the media.
‘ALL WEATHER’ STRATEGY
In China, where unpredictable “black swan” events like Beijing’s tech crackdown, the Russia-Ukraine war, and COVID-19 lockdowns have shaken up the markets, the “All Weather” strategy has become popular. This is a way of investing in multiple assets that is meant to be unaffected by changes in the economy.
The consistent performance of Bridgewater’s China funds, which mostly target wealthy individuals, was highlighted in a sales pitch viewed by Reuters. In the four years following its launch in October 2018, Bridgewater’s first China fund returned an annualised 15.6%. This compares to a return of 3.7% for the CSI300 Index and 5% for Chinese government bonds.
According to one of the sources, another fund formed in December 2021 generated a net return of 8.4% from inception to December 2022. The Chinese stock market fell by more than 20% last year.
In addition to returns, Dalio’s lengthy association with China and the firm’s extensive knowledge of Chinese cycles since the Tang era were further selling points. During a roadshow last month, Chen Yin, the head of Bridgewater’s China strategy, stated that fund size is not a goal.
“Ray advised us frequently not to constantly consider funding or business scale in China,” Chen remarked. If we set the highest standards for ourselves and do everything perfectly, we will definitely get noticed in the market.
Bridgewater’s position as the leading foreign hedge fund in China is cemented in 2022.
