By Anirban Sen
NEW YORK, July 1 (Reuters) - Bridgewater Associates' flagship Pure Alpha macro fund posted a gain of 8.1% after braving a volatile market backdrop during the first half of the year, people familiar with the matter said on Wednesday.
Top hedge funds have grappled with turbulence in financial markets this year on the back of the Iran war, as they took heavy losses in the aftermath of the conflict.
Since then, however, the industry has bounced back. In the first six months of the year, the S&P
500 and the Nasdaq Composite jumped 9.67% and 12.48%, respectively, nearing record highs. Large multi-strategy funds like Millennium and Point72 posted double-digit gains during the same period, two sources said.
Bridgewater, which currently manages about $102 billion of assets, has in recent years bet on new strategies, including a fund that uses AI to make investment decisions. It also partnered with State Street Global Advisors to launch an exchange-traded fund.
The artificial intelligence fund, or the AIA Macro fund, delivered an 8.1% gain during the same period, one of the sources said. Since its launch in late 2023, the AIA fund has posted an annualized return of 11.3% and currently manages about $4.5 billion.
Bridgewater's bet on the AI strategy started in 2018 under co-CIO Greg Jensen, who leads the firm's Artificial Investor team and also serves as managing CIO for the Pure Alpha fund.
During the same period last year, the Pure Alpha 18 fund was up 17% as the hedge fund firm's traders capitalized on tariff-driven market uncertainty to post big gains. For 2025, the fund generated a 34% surge in returns, as the hedge fund firm posted the highest profits in its history.
"Coming off their best year since 2009, I’d argue the hedge fund community continues to do their job well. We track nine distinct hedge fund cohorts, and all have produced positive year-to-date returns, with significant strength in fundamental long/short and the macro space," said Tony Pasquariello, head of hedge fund coverage at Goldman Sachs, in a note to clients this week.
STRATEGIC RESET
The latest returns come as Bridgewater is starting to see the benefits of the strategic overhaul orchestrated by CEO Nir Bar Dea in 2023 after he took over the reins of the firm founded by Ray Dalio.
Over the past few years, Bridgewater has, to an extent, managed to reverse years of underperformance leading up to Bar Dea's appointment as co-CEO in 2022. Dalio sold his remaining stake in the firm last year and stepped off the board, capping what was widely seen as a tumultuous leadership transition. Earlier this year, Bridgewater named one of its chief investment officers Bob Prince as the chair of its board of directors.
Westport, Connecticut-based Bridgewater was founded by billionaire Dalio out of his two-bedroom apartment in New York City in 1975. After taking over as CEO, Bar Dea undertook a strategic overhaul by restricting new inflows into Pure Alpha and returning some assets to clients, thereby shrinking the pool of money that the firm managed and betting that it would allow it to maximize returns.
The firm's other top executives include co-CIOs Karen Karniol-Tambour, Jensen, and Prince. In January, Bridgewater promoted macro trader Ben Melkman to deputy chief investment officer, alongside David Trinh and Blake Cecil.
(Reporting by Anirban Sen in New York; additional reporting by Laura Matthews; editing by Megan Davies and Nick Zieminski)
