Ray Dalio Sees Extra Ache Forward in This Debt Cycle

Ray Dalio based Bridgewater Associates in his Manhattan condominium in 1975 and grew it right into a hedge fund colossus—with about $150 billion in property—by way of astute evaluation of macroeconomic traits. Alongside the best way, he developed a set of ideas, later articulated in talks, tweets, and books, that helped form the agency’s tradition of “radical transparency” and made Bridgewater an “concept meritocracy.” Dalio just lately handed off administration of the Westport, Conn.–based mostly agency to the subsequent technology of leaders, however will stay a member of its working board, an investor, and a mentor to senior executives.

Dalio, 73, is stepping down at a time when Bridgewater’s flagship Pure Alpha fund is using excessive—it gained greater than 22% this 12 months by way of Oct. 31—however the world is feeling low. After years of free financial and financial insurance policies and debt-fueled development, many countries are grappling with rampant inflation, and central bankers are elevating rates of interest to chill worth good points. Greater charges, in flip, have clobbered inventory and bond markets, and threaten to tip main economies into recession subsequent 12 months. In the meantime, within the U.S., the inhabitants is very polarized, whereas exterior conflicts amongst superpowers threaten to place an finish to a long time of relative peace.