Dalio’s Bridgewater Associates Appoints Two Investment Chiefs to Head Sustainability Venture

Karen Karniol-Tambour

Bridgewater Associates is starting a sustainability venture that will be headed by Karen Karniol-Tambour and Carsten Stendevad. The world’s largest hedge fund, founded by legendary financier Ray Dalio, has appointed the two as co-chief investment officers to jointly lead the initiative.

The two investors will design investment strategies for clients who are doubling down on environmental, social, and governance (ESG) issues, Bridgewater said Wednesday. The initiative has started just as sustainability has become crucial to understanding fiscal and monetary policies around the world, as well as capital flows and investor behavior, the firm added.

Carsten Stendevad

“It is an increasing priority for our clients to achieve financial goals as well as have environmental and social impacts in their portfolios,” Bridgewater CEO David McCormick said in a statement. “With Karen and Carsten, we are deploying some of our leading investment talent and the power of our systematic investment approach to address these challenges.”

Where appropriate, the venture will incorporate sustainability considerations into Bridgewater’s investment processes, the fund said.

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The Westport, Connecticut-based hedge fund managing $150 billion in assets is also creating a new sustainable investing committee that will be co-chaired by Karniol-Tambour and Stendevad. Karniol-Tambour will still remain a member of the hedge fund’s main investment committee.

Karniol-Tambour was previously the head of investment research at Bridgewater, where she has been for the past 14 years. The macro investor has stressed that social and governance issues will be more important in investors’ portfolios because of the greater role that fiscal policy is playing in today’s markets over monetary policy.

In a panel hosted by the Conference of Montreal last year, she reasoned that fiscal policy “is inherently distributional, it’s inherently social, it’s meant to be choosing who will be receiving what” and will hold greater sway in investments as interest rates across the world continue to be held near zero.

“We’re seeing fiscal policies play the biggest role they have in economies basically at any time in recorded history over COVID, and that’s likely to be the norm rather than the exception going forward,” Karniol-Tambour added.

Prior to joining Bridgewater in 2017, Stendevad was the chief executive officer at ATP, Denmark’s national pension plan. The allocator managed $154.7 billion in assets at the end of last year.

While at ATP, Stendevad stressed the importance of quality sustainable investments. “We are clear that our approach to incorporating ESG factors must never sacrifice returns. We would never trade return for a better ESG profile,” he said in a 2016 interview with research firm FCLTGlobal.

Stendevad also oversees the Bridgewater’s China business.

The sustainability venture will also retain Daniel Hochman as head of sustainability research and Lauren Hardardt as chief operating officer.

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Tags: Bridgewater Associates, Carsten Stendevad, Economy, hedge, Hedge Fund, Investment Fund, Karen Karniol-Tambour, LinkedIn, Market, portfolio, Ray Dalio

The Endowment Index, as calculated by Nasdaq OMX, increased 4.43% on a total return basis for the first quarter of 2021.

The index’s performance was down from a 13.91% return in the previous quarter, but it more than quadrupled the performance of a global 60/40 stock/bond index, which gained only 1.02% during the same period.

The quarterly gains were buoyed by strong equity markets that were boosted by the passage of the $1.9 trillion stimulus package, as well as steady progress in rolling out the COVID-19 vaccines. ETF Model Solutions, which owns the index, said it saw two trends during the quarter within equity markets: the rotations from growth to value and from large-cap to small-cap.

Of the index’s 22 components, 14 ended the quarter on a higher note, while the remaining eight closed it out in negative territory. The top performing component was oil and gas, which increased 36.30% for the quarter, followed by publicly traded master limited partnerships, which rose 21.55%, and metals and mining, which gained 14.08%. The two biggest decliners during the quarter were gold and emerging fixed income, which lost 10.63% and 5.41%, respectively.

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ETF Model Solutions said that as part of the index’s annual review, it was reconstituted and rebalanced during the quarter, with the broad allocations between equities and fixed income changing slightly. The allocation toward equities declined by 1% and the allocation to fixed income increased 1%.

The Endowment Index measures performance for a multi-asset, diversified portfolio that includes global equity, global fixed income, and alternative investments. It applies an objective, rules-based construction methodology based on allocation data obtained from more than 700 educational institutions that collectively managed over $630 billion as of June 30. Each of the 22 sub-indexes that currently comprise the index is investable, and contained within those sub-indexes are more than 47,000 underlying securities.