Bridgewater launches $2 billion fund with machine learning #investment

Bridgewater Associates is launching a fund that will use machine learning as the primary basis for decision-making. The fund will debut with nearly $2 billion in capital from multiple clients and will start trading on Monday. Led by CEO Nir Bar Dea, the fund will utilize proprietary technology developed over a decade, as well as models from companies like OpenAI, Anthropic, and Perplexity. The fund will be managed by co-chief investment officer Greg Jensen, who has been testing the strategy since late last year with a small portion of the main Pure Alpha fund. This move into machine learning is part of Bridgewater’s transformation under Bar Dea’s leadership, following founder Ray Dalio’s transition in 2022. The fund has seen a 14.4% increase in returns this year, after years of lackluster performance. The shift towards machine learning may also impact the hiring strategy at Bridgewater, with a focus on data scientists. The fund’s use of machine intelligence aims to generate alpha, with humans still involved in risk management, data acquisition, and trade execution. Jensen highlighted the limitations of machine learning, including the need for human oversight to prevent the machine from making irrational decisions. Bridgewater has tested the machine learning process on various scenarios, including the impact of political events on asset prices. Jensen emphasized the potential of machines to analyze patterns across different sources of data.

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Source link: https://fortune.com/2024/07/01/bridgewater-2-billion-fund-machine-learning-decision-making-openai-anthropic-perplexity/