Bridgewater Associates, the world’s largest hedge fund with approximately $150 billion in assets, has partnered with the alternative investments platform iCapital Network and plans to broaden access to its strategies, including to RIAs.
For decades, Bridgewater has managed portfolios for institutions like public and corporate pension funds, university endowments, and foreign governments. It previously worked with iCapital to create a one-off feeder fund but is now expanding the relationship and joining the ranks of asset managers available to the platform’s network. The vast majority of RIAs and family offices would be able to invest clients in Bridgewater for the first time using the platform.
“In this evolving economic environment, there is growing investor demand — and need — for strategies that are designed to provide diversification and are uncorrelated to traditional portfolios. Expanding our relationship with iCapital will enable advisors, family offices, and their ultra-high-net-worth clients to now access alternative strategies designed to help support their financial goals,” said Josh Levine, head of marketing and sales at Bridgewater.
It is unclear what strategies will be available on the platform. Details were sparse in a statement Thursday about the partnership. Bridgewater declined to comment further about it.
There are more than 750 funds on iCapital’s platform with an aggregate of $80 billion global client assets. Like other asset managers, Bridgewater has good distribution but iCapital can extend and diversify it with RIAs and family offices.
“The truth of the matter is none of the firms that we work with have problems raising capital,” Lawrence Calcano, chairman and CEO of iCapital Network, told RIA Intel.
Asset managers see the growing number of independent RIAs, collectively managing trillions of dollars in assets for clients, and are looking to get in on the action. Only 45 percent of financial advisors allocate any client money to alternative investments. But investors, especially the wealthiest, are interested in opportunities beyond public markets to increase income or returns and diversify portfolios. In response, a surge of wealth managers are seeking the Chartered Alternative Investment Analyst, or CAIA, designation.
Global alternative assets under management could grow from $10.7 trillion in 2021 to $17.2 trillion in 2025, according to alternatives data and research firm Preqin.
Founded in 2013, New York-based iCapital has had a part in, and benefitted, from the expansion of alternatives. The company raised $440 million in funding two weeks ago, valuing it at $4 billion. Temasek, Singapore’s $381 billion state investment company, led the latest round, which private equity giant Blackstone and others also participated in.
Adding Bridgewater to the platform was a continuation of that momentum.
“Having a firm like Bridgewater on the platform does a number of things. It creates another outstanding investment opportunity for our clients and obviously it signals to the market where the leading managers in the industry are going,” Calcano said.
The Covid-19 pandemic, poor returns, and a couple lawsuits well-covered by the press made for a rough 2020 at Westport, Connecticut-based Bridgewater. But after a lackluster year, the hedge fund has regained ground in 2021.