Ray Dalio and John Paulson

Ray Dalio and John Paulson

Ray Dalio Reaps $13.8b while Paulson Loses $10b in 2011

An interesting juxtaposition emerges when viewing Ray Dalio and John Paulson's returns in 2011.  Ray Dalio made his clients $13.8 billion in 2011 while John Paulson lost $10 billion for his investors during the same time period.  Dalio and his firm, Bridgewater Associates, had three of the twelve best performing hedge funds of 2011; while Paulson & Co. was reeling from a bet that the economy would rebound.
Pure Alpha, part of Dalio’s Bridgewater Associates LP, has earned $35.8 billion for investors since its inception in 1975, said LCH, a firm overseen by the Edmond de Rothschild Group. Losses for New York-based Paulson & Co. last year cut gains the firm has made for clients since its 1994 founding to $22.6 billion, LCH estimated.

Dalio’s Pure Alpha II ran up a 23.5 percent gain in the first 10 months of the year. The manager, 62, had three of the industry’s 12 best-performing funds, Bloomberg Markets reported in its February issue. The firm charges 2 percent of assets as a management fee and gets 20 percent of profits.

Bridgewater, based in Westport, Connecticut, has about $120 billion of assets and uses a macro strategy to try to profit from economic trends. It placed diversified bets in 2011 after predicting a flight by other investors to safer assets such as U.S. Treasuries and German bonds, standing out in a year when hedge funds lost 5.2 percent on average, according to data compiled by Bloomberg. Paulson posted a record loss of 51 percent in one of his biggest funds. Source

Related to: Hedge Fund Update

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