(Bloomberg) — Bridgewater Associates named Nir Bar Dea and Mark Bertolini co-chief executive officers of the world’s biggest hedge fund, opening a new chapter at the storied firm as David McCormick steps down to pursue a career in politics.
Bar Dea, 40, a retired major in the Israeli military, joined Bridgewater six years ago and was promoted to deputy CEO in February 2021. Bertolini, 65, the former CEO of insurer Aetna Inc., has been a Bridgewater director since 2019 and most recently was co-chairman of its newly formed operating board.
Their appointments mark a quick end to a search that the Westport, Connecticut-based firm was forced to undertake when McCormick, 56, began exploring a potential run for the opening U.S. Senate seat in Pennsylvania, his home state.
Bridgewater, which manages about $150 billion and is known for its unusual culture, has struggled with succession since founder Ray Dalio, 72, first ceded day-to-day management in 2011. By the time McCormick was named sole CEO in 2019, at least five people had held the role at various times.
“It is not easy to transition from a founder-led organization with a strong leader and strong culture while having one’s own strong visions and building them,” Dalio said in a note to employees and clients that was co-signed by his co-chief investment officers, Greg Jensen and Bob Prince, as well Mike McGavick, now sole chairman of the operating board. “This is especially true during challenging times such the last two years of the Covid pandemic.”
Last week, Bridgewater revealed more of Dalio’s plans to hand off stewardship of the business he founded in 1983. The firm disclosed the formation of its operating board and the appointment of three new independent directors. Dalio described the board as “the next important step in the transition of leadership and ownership of Bridgewater.”
Over a decade of trying, Dalio has consistently turned to outsiders in his efforts to solve the succession puzzle. Of the five people who previously served as CEO, only one was a longtime Bridgewater insider.
Jensen, who joined the firm in 1996 out of college and rose to become co-CIO, was also co-CEO for several years. He stepped down from that job in 2016, following a disagreement among senior colleagues.
Former Apple Inc. executive Jon Rubinstein was subsequently hired as co-CEO to much fanfare, but he was gone in less than a year, unable to adapt to the firm’s culture. Eileen Murray, who joined Bridgewater in 2011 as president, then served as co-CEO with McCormick. She left in early 2020 and sued the firm a few months later, alleging its leaders threatened to withhold her deferred compensation because she went public with gender discrimination complaints.
Read more: Former Bridgewater Co-CEO Murray Settles Pay Dispute With Firm
While Bertolini’s role on the board has made him familiar with Bridgewater and its oddities, he’s the oldest person to take on the CEO role.
Bar Dea, a native of Tel Aviv who received an MBA from the University of Pennsylvania’s Wharton School, is joining the operating board and will be co-chairman of Bridgewater’s executive and operating committees. He previously co-headed the firm’s Investment Engine, working with senior executives to oversee research, account management and trading functions. Prior to joining Bridgewater, Bar Dea served a short stint as an adviser to the Israeli mission to the United Nations.
Bertolini led Aetna until its acquisition by CVS Health Corp. in 2018. He’s an outside director at Verizon Communications Inc., Massachusetts Mutual Life Insurance Co. and Thrive Global.
Senate Seat
McCormick, a former Army Ranger, Gulf War veteran and senior official in the Bush administration, joined Bridgewater in 2009. Two weeks ago, he took the first formal step in pursuit of the Republican nomination for the Senate seat being vacated by Pennsylvania’s Pat Toomey, filing paperwork for the Friends of Dave McCormick Exploratory Committee.
His probable campaign may create some friction with Bridgewater. During an internal call in early December, McCormick openly disagreed with comments Dalio had made in an apparent defense of China’s leadership.
At the same time, Bridgewater’s work for Chinese clients may open McCormick to criticism among Republicans, who as a whole are mistrusting of China’s motives. The firm manages about $1.6 billion in China.
Bridgewater’s new leaders also face doubts about its ability to generate returns. Since the beginning of 2012, the firm’s Pure Alpha II flagship fund has posted an annualized return of just 1.6%, and a few pension fund clients have withdrawn money or put Bridgewater on watch as a result.
(Updates with succession efforts starting in seventh paragraph.)
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