$160 BILLION HEDGE FUND EXEC: ‘We’ll probably have a much bigger shakeout coming’

February 12th, 20188:14 am @


bob prince
co-CIO Bob Prince.


  • Global markets dived during a rocky week for trading
    last week.
  • Bridgewater Associates’ co-CIO: “We don’t think this
    shakeout will be over in a matter of days.”
  • Fears over tightening central bank policy are expected
    to drive more volatility.

LONDON — One of the most senior figures at the world’s biggest
hedge fund is predicting more volatility in global markets after
a turbulent few weeks for global markets.

Bob Prince, the co-chief investment water of Bridgewater,

told the Financial Times in an interview published on Monday:

“There had been a lot of complacency built up in markets over a
long time, so we don’t think this shakeout will be over in a
matter of days. We’ll probably have a much bigger shakeout

The comments come after a choppy week for global markets. The Dow
Jones Industrial Average
suffered its biggest points drop in history on Monday

rebounding strongly.
However, the slump
resumed on Thursday as the Dow entered correction territory.

The sell-off in the US, which
spread to Asian markets
, was sparked by fears that the Federal Reserve could
be about to raise interest rates again, suggesting an end to the
easy money central banking policy that has propped up businesses
and growth in the post-crisis era.

told the FT:
“Last year equity markets had a free run. But
this year we are going from central banks contemplating
tightening policy to actually doing it. We will have more
volatility as we are entering a new macroeconomic environment.”

US-based Bridgewater is the world’s largest hedge fund, with $160
billion under management. Prince oversees the investment of this
pot alongside the firm’s founder Ray Dalio.

Michael Hewson, the chief market analyst at CMC Markets, said in
an email on Monday morning: “US, as well as global equities, have
undergone their worst fortnight this decade.

“For a market that has enjoyed steady gains and fairly low
volatility over the course of the past two years, the steepness
of the falls speaks to a complacency that has been prevalent for
a while now and which appears to have been shattered in the wake
of a surge in volatility.

“How this plays out over the coming days depends on whether the
rebound we saw on Friday can translate into some form of a base
for a continuation of the uptrend that has been in place for the
last nine years. This may well depend on whether we see further
increases in bond yields or a rise in interest rate expectations
from other central banks around the world.”

Article source: http://www.businessinsider.com/bridgewater-co-cio-bob-prince-on-market-volatility-bigger-shakeout-coming-2018-2