Yesterday, CNBC reported that with more than $100 billion under its management, Ray Dalio’s Bridgewater Associates is once again the world’s largest hedge fund.
Tomorrow, Governor Dannel Malloy and his appointees on the Connecticut Bond Commission will approve a corporate welfare package for Bridgewater Associates that will cost taxpayers $22 million plus. The plus “part” is due to the fact that Malloy is actually borrowing the money to give to the giant hedge fund, meaning Connecticut taxpayers must pay back the money, along with the associated interest.
As for the entire debacle, long-time Wait, What? readers will remember that this is actually Plan B of Malloy’s effort to subsidize one of the most successful companies in the world.
The Connecticut Bond Commission agenda explains the latest version of the plan as follows:
These funds are requested to provide a grant-in-aid and loan, under the First Five Program, to Bridgewater Associates, LP to assist with expansion of its facilities in Westport, Wilton and Norwalk. The company will retain 1,402 jobs and create 750 new jobs. The loan will be provided at an interest rate of 1% for ten years with principal deferred for five years. The company will be eligible for loan forgiveness if it creates the 750 jobs and retains the existing jobs by the end of 2021. Also included are a $2 million grant to assist with training and a $3 million grant for installation of alternative energy systems.
As an aside, Dalio’s pay – last year – dropped to $1.6 billion, down from the $2.3 billion a year he collected a couple of years ago.
Things are tough all over… Malloy’s solution;
While middle class families across the state struggle with massive costs, such as student loans with rates of 8% or more, not to mention rising energy costs, as a result of Malloy’s economic development strategy, Connecticut taxpayer will be loaning one of the 1%’s most elite members with a $17 million dollar loan at 1% [go –figure] with no payments due for five years – and, should the company stick to its present business trajectory – they don’t have to pay back the loan at all. In addition to the $17 million, Dalio and his company will get $2 million to help subsidize their worker training program and $3 so that they can install some “alternative energy systems.”
Meanwhile, Connecticut’s state budget deficit is about $250 million and growing, The Malloy administration has laid off about 1,000 state employees in the last few weeks and Malloy’s new budget counts on his ability to ax as many as 3,000 more state employees in the coming couple of months.
Called by some, the Reverse Robin Hood Strategy, were in Connecticut we know it as Dannel Malloy’s approach to the advanced capitalist system, one in which taxpayers work extra hard so that their government can give money to successful businesses.
For those who want to know more about Malloy’s horrendous Bridgewater give-a-way program, some of the details can be found in previous Wait, What? posts on this issue.
Oh, and as for the $2 million Connecticut taxpayers are giving to help Bridgewater Associates train their staff? Check out,
As long-time Dealbreaker readers know, we have been writing about the slightly unorthodox culture at Bridgewater Associates since 2010, when we received a spiral-bound copy of Principles, the hedge fund’s unofficial company handbook penned by founder Ray Dalio. At the time, it was surprising to learn of an asset management firm that explained its reasoning for why employees shouldn’t hesitate to identify and eliminate weak colleagues via a discussion about “a pack of hyenas [taking] down a young wildebeest”; told them that failing to confront a person about their shortcomings to their face made you “a slimy weasel”; pushed them to ask themselves if they’d “earned the right to have an opinion”; insisted that “firing people is not a big deal”; and quizzed them on all of the above and more.
Amazingly, though, the Westport-based hedge fund continues to surprise us with the new and innovative ways it conducts its business, many of which are on display in a Wall Street Journal article today, examining life under the Tao of Dalio..
Trustfalls…ON STEROIDS: “Mr. Jensen also cut a distinctive path as a manager. About three years ago, he supervised subordinates stripping off articles of clothing and setting them on fire during a team-building exercise at an official company retreat.
No doubt Ray Dalio and his company need the money more than we do.