Kevin Roose describes Ray Dalio’s Bridgewater hedge fund as a billion-dollar cult:
Dalio, a tall, gaunt 61-year-old man with a swoop of gray hair, is an adherent of “radical transparency,” a management theory that calls for total honesty and accountability. He’s also a longtime practitioner of Transcendental Meditation and has built its precepts on self-actualization into Bridgewater’s office culture. (He’s even brought in David Lynch, the film director and unofficial TM spokesman, to lead a seminar for his staff.) Dalio expects employees to openly criticize not just the cafeteria fare but also each other; behind-the-back gossip is strictly prohibited. “Issue logs” track mistakes ranging from significant (poorly executed trades) to small (one employee is said to have been issue-logged for failing to wash his hands after a trip to the bathroom) and can result in “drilldowns,” intense sessions — one insider compares them to a cross between a white-collar deposition and the Spanish Inquisition — during which managers diagnose problems, identify responsible parties (“RPs,” in Daliospeak), and issue blunt correctives. Other employees can withdraw recordings of these proceedings from the firm’s “transparency library.”
Should Bridgewater employees need a refresher on the house rules, they can consult their copy of Principles, the 110-page manifesto Dalio has written to codify his philosophies about life, work, and the pursuit of greatness. The book used to be given to all Bridgewater employees in paper form and is now distributed via a custom app. Dalio’s axioms are studied with Talmudic intensity at the firm, and conversations with employees tend to be sprinkled with company jargon: “ego-barrier,” “probe,” and the ultimate Bridgewater insult, “suboptimal.”
“Empathy and kindness aren’t a top priority there,” says a former Bridgewater employee. The firm’s culture of absolute candor is designed to strip out emotional considerations and emphasize cold, Vulcan logic in all decision-making — the thin-skinned need not apply. But firm loyalists insist it sounds worse than it is. “Every organization is absolutely riddled with problems,” says one, “but we have a way of fixing them.” Dalio’s Principles, acolytes say, allow the firm’s researchers and traders to sidestep office politics and ego-stroking and focus on what really matters: beating the markets.
Which Bridgewater has certainly done. Last year, the firm put up the best numbers in its 36-year history, notching a nearly 45 percent gain in its most aggressive fund on its way to a total haul of more than $15 billion. Those returns — which CNBC noted were greater than the 2010 profits of Google, Amazon, Yahoo, and eBay combined — vaulted Bridgewater even further ahead in the hedge-fund rankings and reportedly netted Dalio a personal windfall of more than $3 billion.