Since this year, bridge water is facing many challenges. In the first half of the year, the total AUM of qiaoshui dropped by nearly 200 billion yuan, and one of its flagship funds lost about 14%, erasing the gains of about five years.
In addition, qiaoshui was also deeply involved in litigation, and was sued by the former CEO and pointed out by the court that it had forged evidence. After frequent negative news, there are also voices in the market that bridge water fell into the altar..
Once many times in the stock market disaster, Dario made a big profit against the trend, can this time reproduce the legend? Lets wait and see.
Qiaoshui rare, dozens of layoffs
Because we dont need so many people during the epidemic
Early this morning, the Wall Street Journal reported that bridge water fund had laid off dozens of employees this month, involving research department, customer service department and human resources department. Even the veterans who have worked in qiaoshui for more than 15 years also include members of the core management team conceived by Dario.
Although the number of layoffs is small, it is still a rare large-scale layoff for the worlds largest hedge fund company.
Considering that novel coronavirus pneumonia is changing the world, and because more employees are working at home, we do not need the same number of logistics staff as they used to do, Qiao Shui said in a statement. Innovation technology has changed the companys demand for talent, and has changed the way companies serve customers, and we want to become more efficient.
According to people familiar with the matter, these changes are positive and will help bridge water fund to focus on its core areas of investment and communication with customers.
Although this will result in a higher than normal turnover rate this year, it will not be much higher than normal, and we will continue to invest and hire in key areas, Qiao said in an email. A source close to Qiao Shui told the Wall Street Journal that it would like to avoid recruiting new employees in the near future.
It is reported that in 2019, the number of employees of qiaoshui will be about 1600. At present, most of the employees of qiaoshui are working online and remotely.
People familiar with the matter told the Wall Street Journal that the fired employees will receive 18 months of medical insurance, additional severance pay, a prorated annual bonus and certain re employment assistance.
As soon as the news came out, some netizens sighed about the employment market in the United States, bridge water has laid off workers..
Some netizens think it is normal to subtract after the epidemic.
More netizens are worried about the career of grassroots workers.
In 2016, qiaoshui also carried out a large-scale layoff of 150 people. At that time, in a letter to customers, qiaoshui said that as an innovative measure to improve the efficiency of the company, it would lay off staff and restructure its organizational structure for non investment departments which were inflated, inefficient and bureaucratic. As of September 2016, the main fund of qiaoshui lost 9% in the current year.
A flagship fund lost 13.6% in the first half of the year
The total AUM of the company decreased by nearly 200 billion yuan
Qiaoshuis recent layoffs reflect the challenges it is facing in the near future.
According to the Wall Street Journal, Bridgewaters flagship fund, pure alpha, lost 13.6% in the first half, erasing gains over the past five years. In March this year, the fund made the biggest loss in history.
The performance level of qiaoshui is far below the market average. In the first half of this year, US hedge funds lost an average of 3.49%, according to HFR.
Due to the dual effects of investment losses and customer redemptions, the total AUM of the bridge water fund decreased from $168 billion at the beginning of the year to $140 billion by the end of June, a decrease of $28 billion, or about RMB 196.4 billion.
Bridge water fund is raising billions of dollars from new and old clients to offset the impact of customer redemptions on the size of the fund, the Wall Street Journal quoted sources as saying.
Sued by the former CEO
Recently, he was accused of forging evidence
Early this morning, several foreign media also reported that Eileen Murray, the former joint CEO of qiaoshui, filed a lawsuit against qiaoshui. Irene? Murray said Bridgewater withheld $20 million to $100 million in deferred pay because she disclosed a sex discrimination dispute with the company.
And qiaoshuis troubles are not limited to this lawsuit. Recently, the bridge water fund lost a lawsuit against two former employees, Zachary squire and Lawrence minicone, and was charged with falsifying evidence.
Qiao claimed that the two defendants violated the contract and embezzled business secrets. According to court documents, the worlds largest hedge fund, Jinqiao water, was found by an arbitration panel to create false evidence in an attempt to prove that two former employees had stolen its trade secrets, according to court documents.
According to public information, the two left qiaoshui about four years ago to start tekmerion Capital Management LP, with assets under management of about $60 million.
According to the documents submitted to the court by the defendants lawyer on July 1, after the two defendants left for four years and the non competition clause expired two years later, qiaoshui fund filed a lawsuit against them, claiming that they had violated the contract and embezzled trade secrets, accusing them of infringement of trade secrets, breach of contract and unfair competition.
However, the law does not seem to be on the side of qiaoshui. The arbitration tribunal held that these so-called commercial secrets are not trade secrets at all, but public information, which qiaoshui fund clearly knows.
The tribunal also pointed out that the qiaoshui fund had made false evidence, accusing the two former employees of unfair competition after setting up their own hedge funds, because qiaoshui had to disclose relevant information to potential investors, which the arbitrators called malicious accusations.
According to the verdict, the two defendants will be compensated with $2 million in ATTORNEYS fees and other expenses.
Bridge water falling down the altar?
As the founder of the worlds largest hedge fund, Dario was once regarded as a market vane and a Wall Street legend. His story of leading bridge water through many stock market disasters was widely spread in the market.
In October 1987, the United States experienced the stock market crash known as Black Monday, while Darios Bridge Water Fund made a profit of up to 22%, which was called October hero by the media at that time. In 2008, the stock god Warren Buffet suffered as much as 9.6% of the loss, but Qiao Shui foresaw the crisis in advance, and obtained as much as 14% of the positive income. The European sovereign debt crisis broke out in 2010, and the hedge fund industry as a whole performed poorly. However, qiaoshuis pure alpha fund actually made a profit of up to 45% in 2010.
Nikolaos panigirtzoglou, JPMorgan strategist, said recently that most risk parity assets were performing in line with the S & P 500 index, so they may not have experienced extreme earnings declines before, but that has changed.
Daniel Seiler, head of multi asset management, said, if you think about strategies to reduce volatility based on the negative correlation [of stocks and bonds], if [equity bonds] are no longer [negatively correlated], the income of your entire portfolio may be reduced. Obviously, we need to find a new risk balancing strategy now.
Recent layoffs and litigation disputes have also led to more disputes over bridge water in the market.
Some netizens think that the bridge water artificial facilities collapse..
Some netizens even feel that the index fund is stable.
Can Dario return the king this time? Well see.
Dario: the reserve currency status of the US dollar is at risk
Even though he is facing some challenges, Dario is still actively exporting the depth perspective.
Recently, Dario hinted at the risk of the dollar. He said the novel coronavirus pneumonia is causing a huge stress test. The US is putting the dollars reserve currency status at risk. Cash is the riskiest asset, not the safest asset.
Dario believes that the recent actions of central banks mean that capital markets are no longer free and that cash and bonds will become junk as central banks print more money.
On July 16, Dario published his latest long article, the big cycle of the United States and the dollar, Part 1, on LinkedIn.
Dario believes that the United States is still the most powerful empire in the world, but it is in relative decline, and Chinas power is rising rapidly, which is not comparable with other powers.
Dario said the United States comparative advantages in education, competitiveness, trade and production have been declining over the past 100 years, while its relative strength in innovation technology, reserve currency status, financial center strength and military has remained at (or close to) the highest level. China is catching up with the United States in all these areas, comparable in many ways, and growing much faster than the United States.
Recently, a number of European and American enterprises have applied for bankruptcy or are on the verge of bankruptcy. The enterprises that can maintain themselves have tried their best to save costs, layoff wave has swept across Europe and the United States.
Yesterday, a number of foreign media reported that due to the increased size of direct retail business, Nike will carry out certain layoffs, with one-time cost between $250 million and $250 million.
On the 23rd of this month, a German magazine revealed that Daimler group, the parent company of Mercedes Benz, plans to expand the scale of layoffs and consider closing some overseas factories to further reduce costs. This layoff may cost 30000 people out of work. Daimler group has not officially responded.
On the 21st, LinkedIn, an enterprise recruitment matchmaking platform, announced that it would cut its employees by 6%, about 960. This is mainly due to the fact that the epidemic has forced global enterprises to reduce their demand for talents, thus affecting the recruitment related services. LinkedIn CEO Ryan roslansky pointed out through an open letter from employees that although LinkedIn successively launched new platform functions in the first half of the year, such as virtual activities, virtual interview feedback, and reliable news, and achieved results in marketing, learning and sales programs, the company was still hard to avoid the impact of the global epidemic.
On the 20th, marks and Spencer announced that 950 employees would be laid off because of the impact of the new epidemic and the need for transformation. British fashion company Ted Baker said on the same day that it plans to cut about a quarter of its employees in the UK because of the financial difficulties caused by the epidemic.
Burberry, a British luxury brand, will restructure its corporate structure and lay off staff to cut costs. It is expected to cut 500 jobs worldwide, accounting for 5% of the global workforce.
Source: Guo Chenqi, editor in charge of China fund daily_ NBJ9931