Bridgewater vs AQR vs Point72

Hello there - what is the fundamental difference between Bridgewater, AQR and Point72 besides the AUM? I am more interested in how these 3 funds are fundamentally different and how a potential investor decides to invest in, let's say, Bridgewater vs AQR vs Point72.

Thanks!

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Best Response

In a general sense, Bridgewater is global macro-oriented. Dalio is known to run quant strategies, but their actual methodology is a bit of a black box. AQR does a variety of things, but Asness personally subscribes to a modified version of the Fama-French. Factors models with value, momentum, and a few other more creative factors with an academic quant underpinning (they love Wharton and UChicago people since those were the alma maters of the founders). Point72 is fundamental long-short that uses big data to help inform research. The firm has made a pivot away from the classic trader-type, as Cohen was, but I'm sure trade frequency is still higher than lots of discretionary peers' and in-line with other multi-managers' (i.e. Citadel and Millennium). Portfolio allocation is still discretionary, though, and the ~100 portfolio managers at the firm need to stay relatively close to beta neutral. The plurality of trades seem to be event-driven or around earnings season, but the firm has taken a more long-term look as of late.

As for returns, Bridgewater and AQR are slightly more comparable due to their vast AUM. Problem is, their allocations across strategies and funds are different. Bridgewater has been known to have consistent, decent, but somewhat unspectacular returns -- not due to any fault of their own, but due to their size. AQR has a similar problem, but to my knowledge their flagship fund has performed solidly with slight hiccups during the crisis and during a short period in the 1990's. Point72 had blockbuster returns as SAC that are likely only surpassed by Rentech, but that sort of performance has become harder to achieve due to strict risk controls, compliance, and (once again) its own size. Still solid to my knowledge since 2014, however. Hope this helps! Very different funds with very different styles, but all are fantastic.

 

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