Ray Dalio, founder and CEO of the $160 billion alternative investment firm Bridgewater Associates, took to LinkedIn on Tuesday to voice his displeasure at a recent Wall Street Journal article on his firm and its culture, claiming the story exemplifies what he calls an “epidemic” of “fake and distorted media.”
Dalio’s missive concerned a widely read December 22 story entitled “The World’s Largest Hedge Fund Is Building an Algorithmic Model From its Employees’ Brains.” The article, written by Wall Street Journal reporters Rob Copeland and Bradley Hope, reports that Bridgewater is attempting to “automate most of the firm’s management” — an effort that would “represent a culmination of Mr. Dalio’s life work to build Bridgewater into an altar to radical openness — and a place that can endure without him.” The story delves into the firm’s controversial corporate culture and Dalio’s “unorthodox management approach”; this includes the 123-page manifesto (entitled “Principles” and written by Dalio himself) with which employees are expected to comply, as well as the firm’s commitment to what Dalio calls “radical transparency.”
Bridgewater’s idiosyncratic culture has long been a point of intrigue for the media as well as the investment management industry. Rarely one to shy away from a confrontation — that, after all, is often a by-product of radical transparency — Dalio comes out swinging against the paper in the LinkedIn post, though not before qualifying his decision to do so.
“I have mixed feelings about describing our most recent experience with the Wall Street Journal because many people might misconstrue my doing this as me simply complaining about an article that I didn’t like,” writes Dalio, who earned an estimated $1.4 billion in 2015 according to Institutional Investor’s Alpha’s Rich List of the highest-earning hedge fund managers. “While I certainly don’t want to let the inaccuracies about Bridgewater stand, my more pressing motivation is to give you a window into how media is often made because I believe that those of you who haven’t seen it from the inside will find it eye-opening.”
Dalio objects not only to the article’s tone but also to the information presented in the article, explaining at length how Bridgewater provided the reporters with alternative sources of information. But rather “than seeking to understand how the culture and radical transparency work or referring to such facts in their article,” Dalio argues, “they chose instead to push the story that they wanted to write.” Dalio suggests that readers worry about “the systemic risks arising from fake and distorted media.”
The phenomenon of so-called fake news — in which stories that contain false or misleading information nonetheless gain broad traction, typically through social media outlets such as Facebook and Twitter and other media platforms and blogs — has become a hot-button issue of late, particularly following Donald Trump’s U.S. presidential election win in November following an unusually bitter and polarizing campaign. Many commentators have pointed to the fake news phenomenon as a contributing factor in Trump’s win over Hillary Clinton.
Like others, Dalio sees fake news as a problem. “In my opinion, if people don’t correct such inaccuracies and don’t fight against this problem, continued distortions in the media will prevent the public’s accurate understanding of what is happening, which will threaten our society’s well-being,” he writes in the nearly 2,700-word post.
For its part, the Wall Street Journal defends the story and its reporters. “The Wall Street Journal stands by its strong reporting about Bridgewater Associates,” wrote Steve Severinghaus, a spokesperson for parent company Dow Jones, in an e-mail to Institutional Investor. “We have reviewed the efforts undertaken for this article and are confident that the same high journalistic standards that have served the publication and its readers well for more than 125 years were fully applied in this instance.”
This is not the first time that Dalio has voiced his displeasure at the mainstream press. In March, Dalio wrote a two-page missive to investors, entitled “Our Challenges with the Media,” suggesting that because of Bridgewater’s traditional refusal to deal with the media, impressions of the firm have been “distorted.”
On social media Dalio received many compliments on his January 3 post, but not all commentators agreed with the hedge fund manager’s characterisation of his treatment by a major newspaper.
“There is a difference between fake news and news you don’t like,” wrote Kris Frieswick, executive editor for the business magazine Inc., in a comments on Dalio’s post. Fake news, she argues, “is when people make facts up. Fake news is NOT when people disagree about the interpretation of the real facts on the ground. I encourage people who rail against ‘fake news’ to actually talk to a journalist about how news gets made.”
