An art market lesson from the world's largest hedge fund
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An art market lesson from the world's largest hedge fund
The louder you promote transparency, the less I believe you
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If you can convince the world you’re already doing a particular thing, do you ever have to actually do it? The answer is no in more—and more consequential—cases than you might think. One of those cases, a recent book argues, is the world’s largest hedge fund, whose founder preached a gospel of “radical transparency” and intellectual meritocracy while running the company for decades as an Orwellian surveillance state that mercilessly punished dissent in even the most mundane matters.
The book in question is New York Times journalist Rob Copeland’s The Fund, a deeply reported, unauthorized history of Bridgewater Associates and its billionaire founder, Ray Dalio. One of The Fund’s chief lessons is that the market actors bellowing the loudest about their ethical bona fides are often the people most deserving of extra scrutiny. In that sense, Bridgwater’s story isn’t just a cautionary tale for Wall Street; it’s equally relevant to an art trade where the staunchest pledges to move into the sunlight have sometimes come from the people hiding the darkest secrets.
For the uninitiated, Dalio established Bridgewater in 1975 after modest stints as a commodities and futures trader for a couple midlevel New York brokerages. His core investing insight was that he could stabilize returns by balancing a portfolio between long and short positions—in other words, between securities he was betting on and securities he was betting against. The specific mix of assets in each category was correlated, so that if one side of the portfolio went up, the other should go down, and vice versa. Dalio’s firm would also use leverage (aka borrowed money) to either amplify certain trades or make additional ones.
Although he wasn’t the first to use this “hedging” strategy (that distinction goes to, as Copeland describes him, “a middle-aged ex-communist spy and sociologist” named Alfred Winslow Jones in 1949), Bridgewater was the first to go stratospheric with it. The market research firm LCH Investments concluded in 2020 that Dalio’s firm “had made more money for investors, since inception, than any other [hedge] fund, a staggering $46.5bn.” The caveat was that that number represented an unadjusted lifetime total, meaning that Bridgewater’s relatively old age had given it what Copeland describes as “a running start” on nearly all its competitors.
But in Copeland’s telling, Bridgewater’s longevity owes as much to Dalio’s dogged self-promotion as his investing acumen. The founder set out to establish himself in the minds of, first, the investing class and, later, the broader public as a world-class thinker, not just a world-class trader. This looks doubly wise in retrospect given his penchant for predicting market crises that rarely materialized; Copeland relays, for example, that Bridgewater’s then head of marketing joked in a 2006 meeting that Dalio “had called 15 of the last zero recessions.” (The founder, who was present, “didn’t laugh,” he notes.) Nevertheless, Dalio’s aggressive marketing tactics kept him near the front of the conversation across multiple media formats for much of his career, regardless of the fund’s performance.
You don’t have to squint to see similar figures in the art market. I won’t name names, but after seven years in the art trade’s editorial ranks, I can say with confidence that the industry voices you hear most frequently tend to be the ones that journalists under the strain of an ever-increasing load of deadlines and an ever-declining cache of resources can depend on to give a colorful quote or two ASAP. How often these talking heads have been right in the past, let alone whether they’re especially likely to be right about the present or future, often becomes a secondary concern. Whether in the art trade, finance, or any other business, interview subjects are a little like professional athletes in this respect: the best ability is availability.
If only Dalio’s relevance to the art trade stopped there…
‘Pain + Reflection = Progress’
As Bridgewater’s market performance came down to earth between 2008 and Dalio’s retirement in late 2022, he shifted more and more toward styling himself as something between a management-theory guru and a lifestyle philosopher. At the crux of this image was what he touted as a companywide policy of “radical honesty and radical transparency,” by which even the lowliest staffer supposedly had the right to question the firm’s leadership on any issue from investing strategy to restroom maintenance. All that mattered, Dalio evangelized, was getting to the best solution, no matter how much conflict it caused. If you weren’t ready to endure the discomfort, well, maybe you weren’t cut out to be successful.
This vision was irresistible to the 21st century entrepreneurial class and countless other hustle-p0rn strivers and self-optimizers. For a lot of them, one of the only things better than a disruptive, billionaire-proven framework to organize their lives and careers was one that came equipped with a righteous justification for acting like a complete dick. In the 14 years preceding Dalio’s retirement, he and his firm became a godsend to these crowds.
There was just one problem, as Copeland relays one-time Bridgewater co-CEO Jon Rubenstein telling friends after his departure: radical transparency was “a fraud.” It wasn’t so much that Dalio required new recruits to be drilled on The Principles, an ever-evolving corpus of axioms he had hammered out to guide decision-making in matters professional and personal (epitomized by the mantra “Pain + Reflection = Progress”) .¹ The killer was that Dalio enforced The Principles by developing a multifaceted system of surveillance, public shaming, and purity tests to ensure that his own views reigned supreme. (For the record, Bridgewater refutes Copeland’s reporting on this front, and most others, at nearly every turn.)
Central to this alleged chaos engine were Bridgewater’s “baseball cards,” employee profiles with rankings for 77 attributes based on The Principles. Dalio’s idea, Copeland writes, was that “everyone would rate one another, everyone would get a vote, and everyone would be judged in the same categories. Even better, every bit of information on every baseball card would be visible to all, so there would be instant accountability and no hiding the truth.” Setting aside the culture of cannibalism this device was sure to engrain in the company’s hypercompetitive workforce—especially once the baseball cards were converted into an app that could be updated and monitored in real time—the problem, according to Copeland, was that Dalio demanded the staff hard-code into the system that no one’s ranking could ever surpass his own.²
The baseball cards were only one facet of the alleged madness. Under Dalio’s direction, the company created the Transparency Library, a vast audio and video archive of meetings, reprimands, and corporate tribunals often capturing staffers descending into states of psychic and emotional distress under questioning (typically by Dalio himself) that was edited to seem far less abrasive than it had actually been.³ Various managers, including preening self-interest goblin James Comey during his stint as Bridgewater’s general counsel, were known to bait lower-level staff into infractions whose identification and punishment might elevate their own standing at the company. Dalio even established The Politburo, a team of around two dozen employees named after the Chinese Communist Party’s central policy organ and “given vast remits to conduct investigations across the firm,” Copeland writes, giving the founder “eyes and ears everywhere.”
Amid this paranoid pile-on, the ultimate absurdity of the supposed “idea meritocracy” and exemplar of radical transparency was its closely guarded strategy in the financial markets. Citing a conversation with a friend of Dalio’s one-time protégé at the firm, Copeland writes: “The secret to Bridgewater’s vaunted investment process… was that there was no secret. Dalio was Bridgewater, and Dalio decided Bridgewater’s investments.” Worse, of the roughly 2,000 employees at the firm during its peak, the only people who knew this were the members of what the founder called The Circle of Trust, around ten executives who signed lifetime contracts to see how the firm shaped its portfolio. The answer, according to Copeland, was that Dalio essentially made all the calls himself using an Excel spreadsheet.
Transparency shields
The art market has no shortage of double-standard-bearers when it comes to openness, either. For years’ worth of conference appearances and interviews, Lisa Schiff, the once-high-flying advisor, “spoke at great lengths about the importance of transparency, about ethical conduct, about mitigating conflicts of interest,” Association of Professional Art Advisors president Alex Glauber told the New York Times in its profile of Schiff’s downfall. After turning herself in to the authorities for fraud in 2023, she could be sentenced to up to two decades in prison in March.
Similarly, Douglas Chrismas, the infamous dealer who founded Ace Gallery in LA in 1967, portrayed himself for decades as a tireless advocate for the artists he showed. He began a two-year prison sentence for embezzlement earlier this month, with multiple artists saying he still owes them significant amounts of cash, works they had consigned him, or both. (Disclosure: One of those artists is Mary Corse, who I worked with closely during my second stint at Kayne Griffin Corcoran gallery [now Pace’s LA location] in 2016-17.)
On a different but related front, consider Dmitry Rybolovlev, the Russian-born billionaire who unsuccessfully sued Sotheby’s in the Southern District of New York to try to recoup tens of millions of dollars in fees from select transactions involving the Swiss dealer Yves Bouvier. Rybolovlev testified in the 2024 trial that he had brought the suit to force the auction house—and the art trade overall—into greater transparency. Then Sotheby’s lawyers unsheathed a brutal cross-examination of Rybolovlev premised partly on highlighting the numerous ways he and his allies had repeatedly obfuscated the truth about his identity or interest level during negotiations to buy and, later, sell Leonardo’s Salvator Mundi.
Art advisors, gallerists, buyers—each of these groups (and more) has incentives to defy the law and the art trade’s unwritten rules. No matter who swings the spotlight their way to crusade for transparency next, just remember one of the core tenets of stage magic: the best way to hide one hand’s trickery is to use everything else you have to put on a show too bombastic to ignore.
Copeland reports that, by 2011, printouts of The Principles given to new recruits spanned 110 pages, with later versions swelling to 208 pages. By the time Rubinstein arrived at Bridgewater in 2016, the number of Principles had reached 375; in comparison, Amazon and Toyota had 14 each.
One question I still can’t answer after reading the book is how anyone at Bridgewater ever got any actual work done. Copeland reports that the company’s engineers “determined that, on average, employees were opening the [rating] app every 20 minutes throughout the workday, either to rate one another or check on their own metrics.”
Jamie Gorelick, a former US deputy attorney general, advised Dalio to either destroy the Transparency Library or cull it once she came onboard as a consultant in 2016. In Copeland’s words, “It was on the opposite end of best legal practice to keep a trove of recordings that could be forcibly unearthed in a lawsuit,” especially when “a considerable chunk of them” could “portray someone in a negative light.”
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© 2025 Tim Schneider
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