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Bridgewater, one of the world’s largest hedge funds, is joining forces with State Street’s asset management arm to tap retail investors in the latest effort by money managers to look for new customers beyond their traditional strengths.

The partnership announced on Tuesday will get started with an exchange traded fund that will track one of Bridgewater’s best-known strategies. State Street Global Advisers has filed plans with the US Securities and Exchange Commission for an “All-Weather” ETF, which seeks to profit in all types of market conditions by holding a wide range of assets.

If approved by the regulator, it will be sub-managed by Bridgewater using its “risk parity” strategy, which uses leverage to weight assets by expected volatility. Once it starts trading, the ETF could offer other investors new insights into Bridgewater’s famously secretive methods.

The two groups also announced a larger partnership aimed at enlarging the potential market for complex products including hedge funds and private equity and credit.

It is part of a stampede by traditional asset managers such as State Street to strike such agreements with the big names in alternative assets. In the past six months, there have been tie-ups between Capital Group and KKR, BlackRock and Partners Group, and SSGA has a separate partnership with Apollo.

The alternatives managers hope to reach wealthy individual customers at a time when the institutional investors are holding firm or cutting back on their complex investments. The traditional managers want to stay relevant as retail customers and their advisers move into new sectors and like the higher fees these products can command.

“Bridgewater is known for its 40-year history of delivering resilient, diversified portfolios and insights to many sophisticated institutional global investors,” Anna Paglia, State Street Global Advisor’s chief business officer, said. “This strategic relationship will now bring that portfolio construction expertise to retail investors as well.”

State Street, which invented the ETF, is best known for its low-fee passive funds but the $4.7tn money manager is making a big push into racier products, with more than 80 launches since Paglia’s arrival earlier this year. They include ETFs focused on digital assets and one done in conjunction with Apollo to invest in public and private credit.

Bridgewater, which was founded by Ray Dalio, is attempting to rebuild after a difficult period that included a stormy succession process and poor returns accompanied by significant outflows. People familiar with its results said it had $100bn under management at the end of August, well below its all-time peak of $160bn. Its flagship Pure Alpha fund sustained large losses in 2022 and 2023.

The new ETF seeks to follow the strategy behind Bridgewater’s other well-known product, the All Weather hedge fund.

“At Bridgewater, we see global investors increasingly focused on portfolio resiliency and desiring durable client portfolios,” Karen Karniol-Tambour, Bridgewater’s co-chief investment officer, said. “We are excited to broaden access to our approach.”

Both companies declined to comment beyond their official statements, citing SEC rules that bar investment managers from discussing specific products before they have been approved.

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Goldman Sachs’ chief executive has warned that global investors are still “predominantly on the sidelines” over deploying capital in China because of weak consumer confidence and difficulties getting money out of the country.

David Solomon said investors “continue to be concerned” about cashing out of investments in the world’s second-largest economy.

“It’s been very difficult over the course of the last five years to get capital out,” he told an event on Tuesday organised by the Hong Kong Monetary Authority, the territory’s de facto central bank.

“I think you’ve got a combination of issues that have global investors predominantly on the sidelines with respect to capital deployment,” Solomon said.

He added that investors would like to see “an improvement in consumption” in China and “continued progress in the opening up of the capital markets”. 

Speaking on the same panel, Morgan Stanley chief executive Ted Pick said he agreed with Solomon. “Transparency is important and battling deflation takes time,” he said.

Deflationary pressures have increased in China, where the country’s leadership is trying to stabilise a property sector crisis and boost domestic consumption in order to meet its economic growth target of 5 per cent for the year.

Chinese stocks rallied in September after Beijing launched a stimulus package, including measures to boost the stock market. But the rally has cooled as authorities held off from making significant new fiscal spending announcements.

The CSI 300, China’s blue-chip index, on Tuesday closed down 11 per cent from a post-stimulus peak on October 8.

“The fiscal piece will take time, the real estate dynamic is going to take a number of quarters,” said Pick. “Clearly the name of the game here is to reignite consumer confidence and that’s something that takes a while to take hold, but we’re seeing some green shoots.”

The conference is a sign of HKMA’s sway over global financial institutions even as US-China relations fray. The annual event is attended by the biggest names on Wall Street, in part because the HKMA oversees hundreds of billions of dollars and is a valuable client and limited partner of many of the institutions.

Attendees included Apollo Global Management’s chief executive Marc Rowan, Blackstone president Jon Gray, and leading figures from buyout groups KKR, TPG, CVC and Carlyle.

Solomon and Pick were responding to a question from deputy HKMA chief Howard Lee about whether China’s stimulus package and “positive remarks” from Beijing officials, who stressed the importance of China opening up to the world, would make investors “feel more assured” about the country.

Earlier in the morning, China’s vice-premier He Lifeng delivered a speech in which he said mainland officials wanted to preserve Hong Kong’s status as an international financial centre while encouraging greater mutual market access between the city and the rest of mainland China.

The bank bosses spoke briefly about Donald Trump’s US election victory. Citi chief executive Jane Fraser said it had prompted a “big unlock” in demand for initial public offerings and mergers and acquisitions that had been “very gummed up” in recent years.

The prospect of reduced regulation “puts many CEOs in a good mood”, she said.

CNN
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California Gov. Gavin Newsom will delay his decision on clemency for Lyle and Erik Menendez, who were convicted of murdering their parents in 1989, until the newly elected Los Angeles County district attorney completes his review of the case, Newsom’s office said Monday.

“The governor respects the role of the district attorney in ensuring justice is served and recognizes that voters have entrusted District Attorney-elect (Nathan) Hochman to carry out this responsibility,” Newsom’s office stated. “The governor will defer to the DA-elect’s review and analysis of the Menendez case prior to making any clemency decisions.”

Current District Attorney George Gascón, who has voiced strong support for the Menendez brothers’ clemency petition and submitted letters to the governor advocating for them, requested a judge in October to resentence the siblings, who are serving life without parole.

Gascón was recently defeated in his reelection bid by Hochman, a former federal prosecutor who campaigned on a tougher stance against crime. With Hochman set to take office in December, questions have arisen about the future of the resentencing effort and the clemency process.

Hochman stated that he is committed to thoroughly reviewing the Menendez case, including the confidential prison files, trial transcripts and extensive exhibits, as well as consulting with prosecutors, defense attorneys and family members of the victims.

“This is the same type of rigorous analysis I have done throughout my 34-year career in criminal justice as a prosecutor and defense counsel, and the same type of thorough review that I will give to all cases regardless of media attention,” he told CNN.

The brothers, family members and the public deserve a thorough review, Hochman said.

The renewed examination of the Menendez case comes more than 35 years after Jose and Kitty Menendez were shot dead in their Beverly Hills home. Their sons, then 21 and 18, were arrested less than a year later in 1990 and found guilty of first-degree murder in 1996.

During their two highly publicized trials, the brothers did not dispute the act of killing their parents but claimed self-defense, citing a lifetime of physical and sexual abuse by their father. The first trial, notable for being one of the earliest televised cases, ended in a mistrial due to a hung jury. In the subsequent trial, much of the evidence regarding the alleged abuse was deemed inadmissible, resulting in the brothers’ conviction and life sentences.

Attention to the case has surged following the September release of the Netflix series “Monsters: The Lyle and Erik Menendez Story.” Netflix recently launched a documentary on the case, featuring the brothers discussing the events that led to the tragic killings.