Bridgewater Associates, the hedge fund major led by CEO Nir Bar Dea, has launched a new strategy that uses machine learning as the primary basis for its investment decision making process, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as confirming that the fund, which started trading on Monday, debuted with nearly $2bn in capital from more than half a dozen clients.
As part of the broader Artificial Investment Associate Labs project led by Co-Chief Investment Officer Greg Jensen, the fund leverages proprietary technology developed over the past decade and will also incorporate models from OpenAI, Anthropic and Perplexity, among others.
Bridgewater has reportedly been testing the new strategy, which will be run by Jensen, since late last year with a small portion of the firm’s main Pure Alpha fund totalling around $100m. Pure Alpha has seen a 14.4% gain in the first half of the year following a decade of mostly modest returns, including a 7.6% loss in 2023.
Jensen, 49, who has been contemplating the impact of machine learning on investing since 2012, emphasised the significance of this development. He pointed out that the new fund’s machine intelligence will primarily generate alpha, marking a major leap in investment strategy.
AIA integrates technologies such as large language models, machine learning data models, and reasoning tools to focus on understanding causal relationships in markets to generate returns.
Humans though, will still manage risk, data acquisition, and trade execution to ensure a comprehensive investment process, according to Jensen.
