Nir Bar Dea (40) has been appointed co-CEO of Bridgewater Associates, the world's largest hedge fund and the most successful such fund in the US. A year ago, Bar Dea was appointed deputy CEO, and before that he was co-head of what Bridgewater calls its Investment Engine, combining research, portfolio construction and trading. Bar Dea's latest promotion makes him one of the most senior Israelis in the investment world. He joined Bridgewater in 2015. Bar Dea is the son of Giora Bar Dea, CEO of Israeli food company Strauss Group, and the brother of Gal Bar Dea, CEO of new Israeli banking venture The First Digital Bank (now renamed One Zero). Nir Bar Dea will be co-CEO of Bridgewater alongside Mark Bertolini.
Bridgewater Associates was founded by Ray Dalio, known as "the Steve Jobs of investment," in 1975. In recent years, Dalio has had a less active role in the firm. The appointment of Bar Dea comes after Bridgewater has had one of its less successful years. He and Bertolini replace David McCormick at the head of the firm. McCormick has stepped down in order to run for the US Senate.
In an interview for the "Half an Hour of Inspiration with Eran Gefen" podcast, conducted when he was in his previous role, Bar Dea talked about the special corporate culture at Bridgewater and the firm's investment philosophy. "In the markets, there's a term called Beta and a term called Alpha," Bar Dea explained. "Beta is when you bet on the success of the markets. Markets grow over time, and someone who bets on the Tel Aviv 35 Index or the S&P 500 over time will make money, and it's a very good way to make money.
"Alpha says: 'Listen, I know something that other people don’t know.' When you sell a share short, I say, 'Hey, this guy knows something that others don't.' There's a great debate around the world over whether alpha exists or not, because many people argue that if markets are efficient, alpha doesn't exist. We at Bridgewater have had positive alpha over decades. Each year, we manage to make money out of the assumption that we understand things about how the world works that other people don’t understand."
Bridgewater is a firm that believes in and operates with extreme transparency. As Bar Dea relates, "We record every meeting, and we listen to the meetings every day. That is to say, if your name is mentioned at a meeting, it doesn't matter which, you receive the recording of it automatically. If someone had something to say about you, we want him first of all to say it to your face. Think how much nastiness this takes out of the organization.
"We also have a points system. Everyone goes around with a laptop or iPad, and at every meeting we give each other feedback from one to ten. You can sit opposite me at a meeting and tell me I'm not being sharp. While the discussion is going on, you can grade me three out of ten for sharpness, for example. And then I see on my screen a red dot in real time, during the meeting.
"You can agree or disagree with me. But if you disagree, we'll talk about it, until we decide what the truth is. I think that in many organizations these things don't happen and there are gaps in perceptions. Most people are comfortable with such gaps. It's convenient for me to think that you think I'm a king, and you let me think that I'm a king. I go around as if I am a king, when what you really, really think is that I'm stupid."
The above is a short extract from a full-length interview in Hebrew with Eran Gefen, founder of management consultancy G^Team.
Published by Globes, Israel business news - en.globes.co.il - on January 4, 2022.
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