Bridgewater's Assets in China Surge as Local Funds Struggle

Bridgewater Associates, a prominent hedge fund, has seen its assets in China soar to approximately 40 billion yuan (around US$5.56 billion). This indicates a significant growth, nearly double the figure from the previous year. The fund's growth comes amid a fresh fundraising drive that has attracted significant investor attention.

Strong Investor Demand for Bridgewater's Funds

Bridgewater's fundraising efforts for an existing fund succeeded in January, with an additional 2 billion yuan being raised and nearly all units sold within the first four days of the offering. This rapid sale stands in stark contrast to the challenging circumstances faced by many local Chinese funds, which are struggling to attract investments in the midst of weak market conditions.

The surge in Bridgewater's assets comes despite the economic challenges and declining stock market China has experienced for several years. Bridgewater's All Weather Plus fund, which includes a diverse portfolio of stocks, bonds, and commodities, posted an impressive net return of 10.3 percent last year.

Rapid Growth and Market Dominance

With the latest round of asset accumulation, Bridgewater has cemented its position as the foremost foreign hedge fund in China, with most foreign managers' assets in the country remaining below the 10 billion yuan mark. This robust performance has been drawing attention to Bridgewater's offerings, making them a sought-after investment choice for China's affluent investors.

Bridgewater's 'All Weather' investment strategy, developed by founder Ray Dalio, reflects a low correlation with the broader Chinese equity markets, which have seen a downturn over the past three years. As the primary stock index has fallen, Bridgewater's distinctive investment approach has effectively provided better yields within the Chinese investment landscape.

Outperformance in a Difficult Market

Since its inception in China in October 2018, Bridgewater's first fund has achieved an annualized return of 15.3 percent, which dramatically outpaces the returns of the CSI300 Index and Chinese treasuries. This has come at a time when domestic Chinese equity hedge funds on average experienced a loss, and multi-asset hedge funds saw modest gains.

These results highlight Bridgewater's capacity to navigate the Chinese market successfully, where local funds have largely faced setbacks. Bridgewater's experience showcases not only its own prowess but also underscores the difficulties local funds in China are tackling amidst the current economic climate.

Bridgewater, China, Investors