Bridgewater China Begins 2025 Strong as Copycat Rivals Follow

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Bridgewater China Begins 2025 Strong as Copycat Rivals Follow.

general :: 2025-03-06 :: source - bloomberg

By Bloomberg News

Source image: Bloomberg

(Bloomberg) -- Bridgewater Associates is strengthening its lead in China over global peers, kicking off this year with a strong gain in January after sparking a race among local rivals to follow its strategy of diversification.

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Its Shanghai-based private fund management unit’s All Weather Plus onshore fund returned 2.2% before fees, according to an investor letter seen by Bloomberg. That compared to a 3% loss for the benchmark CSI 300 Index and the 0.2% average return among local multi-asset hedge funds tracked by Shenzhen PaiPaiWang Investment & Management Co. during January.

Bridgewater declined to comment in an email.

The outperformance adds momentum to the onshore growth of Bridgewater in the 5.2 trillion yuan ($718 billion) local hedge fund market. The US giant’s domestic assets under management jumped about 40% last year to more than 55 billion yuan as stable returns attracted more inflows. Meantime, the company’s success has driven other local managers to launch All Weather-themed funds to tap a surging appetite for similar products that diversify across asset classes to ride market volatility, according to Industrial Securities Co.

“Bridgewater China’s success is not only reflected in its own products,” analyst Zheng Zhaolei wrote in a Feb. 24 report. It’s also “spurring a clear trend of industry imitation.”

As investors snapped up the Bridgewater investments very quickly, the firm was unable to soak up all the demand and some investors sought strategies elsewhere, the report said.

The number of private fund products with Quan Tianhou, or the Chinese equivalent of All Weather, in their names tripled to 746 in the fourth quarter from three years ago, according to the report, which cited official registry data.

The All Weather strategy, created by Bridgewater’s founder Ray Dalio in 1996, seeks stable returns through economic cycles by balancing risk exposure across different asset classes. The company’s China operations are headed by General Manager Joanna Alpert, who was also the fund manager until November, when that position was taken over by Zhang Duan.

Compounding Return

The systematic All Weather portfolio contributed 1.7% excluding cash in January, while active management by its team contributed an additional 0.3%, according to the investor letter. That extends the fund’s cumulative return since inception in 2020 to 101%, or an annualized 17.4%. The strategy seeks to provide long-term returns similar to stock indexes, but with lower risks and drawdowns.

The strategy’s performance was “steady” as investors’ risk appetite stabilized during the month, supporting risk assets, the letter said. The CSI 300 slumped more than 5% in early January before paring some of the losses later that month. The gauge has rallied about 6% from its January low.

Bridgewater still sees opportunities this year for accommodative policy follow-through after top officials pledged to ramp up monetary and fiscal stimulus and stabilize asset markets, people familiar with the matter said in January.

More than 30 global firms have set up wholly-owned hedge fund units in China since rules were eased in 2016. Bridgewater remains the only foreign player that has more than 10 billion yuan in assets, with closest global rivals D. E. Shaw & Co. and Two Sigma Investments LP still managing just more than 5 billion yuan each.