Due to renowned hedge fund director Ray Dalio’s enormous popularity in China, local investors have flocked to his funds, but it has also produced domestic rivals who are leveraging his “All Weather” brand and method to try to outwit him.
Bridgewater Associates, the massive hedge firm he created with headquarters in Connecticut, is now fighting back.
To combat the confusion caused by regional imitators, Bridgewater recently registered six “All Weather” copyrights in China in both English and Chinese, according to Joanna Alpert, portfolio manager for Bridgewater China.
Alpert, who is a partner at Bridgewater as well, informed us that it is a problem out there, but they will strive to defend their rights and preserve their intellectual property.
With $150 billion in assets, Bridgewater, the largest hedge fund company in the world, outpaced Winton and Man Group to take the top spot among foreign hedge fund houses in the second-largest economy in the world last year.
In China, where unforeseen black swan events like Beijing’s tech persecution, the Ukraine war, and even COVID curfews have roiled markets, its “All Weather” strategy—a multi-asset investment technique designed to be indifferent to changes in economic conditions—has become popular. In 2018, Bridgewater introduced its first domestic China fund; since then, two more funds have been created.
When it was released in 2018, “Principles: Life and Work,” by Ray Dalio, became a bestseller in China. Since then, “All Weather”-related hedge fund products in China have proliferated, with much more than 100 of them registering with the country’s fund association in only the past year.
Bridgewater’s experiences are representative of the possibilities and dangers that international consumer companies have long faced in China’s enormous market, where their names are frequently duplicated and their products reverse-engineered.
Many will be monitoring how Bridgewater manages the circumstance and whether its performance can be sustained as the competition grows as China widens access to global asset managers.
The extensive use of “All Weather” items, according to Shang-Jin Wei, professor at the University of Chinese business at the Columbia Business School, runs the risk of harming Bridgewater’s reputation if money is lost or returns of knockoffs are subpar.
Based on the statement by Jieyuan Cai, who is one of the well-sought intellectual property lawyers at YuandaWinston, registered trademarks do not ensure legal victory against already-existing products with previous use, even though they will assist stop others from naming new products with All Weather in their names.
In the words of Liu Wencai, the founder of risk managing consultancy D-Union, the All Weather brand registration won’t stop Chinese asset managers from developing products using the identical asset diversification method.
The All Weather strategy, introduced in 1996, uses a variety of assets, including commodities, shares, and bonds, to produce stable returns regardless of economic conditions.
However, the breakdown of assets, their characteristics, and how leverage is used are maintained as Bridgewater’s trade secrets.
Meanwhile, China has always meant far more to self-described Sinophile Dalio, 73, than just financial gains or assets under control.
One percent of Bridgewater’s global business, or assets under management (AUM), were reported to have surpassed 10 billion yuan (or $1.49 billion) in China last year.
Less than ten years after starting Bridgewater in his New York City shoebox apartment in 1975, Dalio made his first journey to Beijing in 1984, which is when his fascination with China really began.
His regular visits have facilitated the growth of strong political ties in Beijing and comprehension of China’s expanding significance in the global industry.
For Bridgewater, China had always had a unique strategic relevance, according to Alpert. He added that if they don’t have a solid understanding of China, they can’t be successful global macro investors.
Their further moves might be based on the fact that the recovering Chinese economy might be interested in welcoming them.