Brunei’s sovereign wealth fund has deepened its ties with Bridgewater Associates, shifting capital from one of the hedge fund’s investment vehicles to acquire a nearly 20% stake in its parent holding company, according to a report by Bloomberg citing unnamed sources familiar with the matter.

The move by the Brunei Investment Agency (BIA) reflects a broader trend among major institutional investors looking to benefit from equity ownership in hedge fund managers rather than relying solely on fund performance. BIA, a longstanding client of the $92bn macro investment firm, still maintains exposure to all Bridgewater funds despite the reallocation, sources confirmed.

The strategy appears to be paying off. While Bridgewater’s flagship Pure Alpha II fund has experienced periods of strong performance — including an 11.3% gain in 2024 and 17% in H1 2025 — its long-term annualised return since 2012 stands at just 2%, trailing returns achieved through direct equity investments in the firm itself.

Bridgewater, which was founded by Ray Dalio nearly 50 years ago, has steadily diversified its capital base over the past decade by selling equity stakes to institutional partners. Notable investors include Texas Teachers Retirement System, Ontario Municipal Employees Retirement System, Singapore’s GIC, and the International Monetary Fund.

Texas TRS, for example, committed $250m in 2012 to Bridgewater’s holding company and has realised an annualised return of 8.7% through March 2025 — a far more attractive result than investing in the Pure Alpha fund over the same period.

Brunei’s 20% position makes it one of Bridgewater’s most significant institutional shareholders to date. The investment also comes shortly after Ray Dalio’s full exit from the firm – a transition that saw the billionaire founder sell his remaining equity and step down from the board.