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Bridgewater: Inside the secretive world of the world’s biggest hedge fund

To an outsider, the hedge fund industry is steeped in mystery, secrecy and exclusivity. But inside the world’s largest hedge fund, transparency is everything.

At Bridgewater and Associates, it’s not just transparency but “radical transparency.” That means straightforward speak, tape recordings of every meeting, and a non-stop electronic peer evaluation of employee performance available to the entire company to read.

Critics say the environment is cult-like. “It’s unique but it’s not for everyone,” says Edward Hess, author of the new book, "Learn or Die: Using Science to Build a Leading-Edge Learning Organization."

"What’s different about the Bridgewater culture is what I call complete candor," says Hess. "There, everything is on the table.” That candor, according to Hess, diffuses office politics and personal motives. The motive, he says, is “’I’m giving you feedback that it is done for the best reasons to help you be all you can be.’"

Hess's research focuses on innovation systems and organizational learning cultures and behaviors. For the book, Hess, who is also a professor at the Darden School of Business, got a rare look inside the corporate culture at Bridgewater, spending two days at their Westport, Connecticut headquarters in September of last year.

The strict corporate culture at Bridgewater is based on the “Principles” document written by founder Ray Dalio. The basis for his philosophy is the seemingly simple goal of living life fully through meaningful work and meaningful relationships.

Achieving goals is more realistic, Dalio believes, if a person is able to accept their weaknesses, is open to blunt feedback about them, and creates ways to work around those weaknesses. In other words, accept the criticism, treasure the opportunity for personal and professional growth, and you will get compensated well in return.

It’s a tough process to buy into for some, Hess says. “Most people who go to work at Bridgewater have made all A’s their whole life and have never received constructive feedback and you come in and you get constructive feedback all the time.”

It’s more than many hires can take. Dalio believes “that [psychological] pain is required to become stronger,” and some simply can’t hack it, says Hess. Bridgewater has a 25% turnover rate for employees in their first 18 months on the job.

Turnover rate is something the company is working on, Hess says. What makes Bridgewater successful is “the right people in the right learning environment using the right learning processes” and hiring is a key part of that equation, he says.

Bridgewater manages roughly $160 billion, according to Forbes. Dalio, who is 65, has a net worth of $15.2 billion.