Connecticut Offers Millions to Aid Bridgewater Expansion
Bridgewater Associates, the world’s biggest hedge fund, intends to build a $750 million headquarters financed partly with state aid in Stamford, Connecticut, according to Governor Dannel Malloy.
The company, which paid founder Raymond Dalio $3.9 billion in 2011, occupies five buildings in nearby Westport. The new headquarters is planned for Stamford’s Harbor Point waterfront district, Malloy, 57, said yesterday in a statement. Bridgewater also committed to adding hundreds of jobs.
Connecticut agreed to give Bridgewater a $25 million “forgivable” 10-year loan at 1 percent interest to help finance two buildings totaling 750,000 square feet (69,700 square meters). It will also provide as much as $5 million for job training, $5 million for alternative-energy systems and $80 million in tax credits, according to the statement.
“This is stealing from the poor and middle class to make a billionaire even richer,” Jonathan Pelto, a former deputy majority leader in Connecticut’s House of Representatives, said by e-mail. “This isn’t economic development.”
Pelto, a Democrat who works as a political consultant and commentator, said it was “shocking beyond words” that Malloy, a Democrat elected in 2010, was giving handouts to a company as wealthy as Bridgewater. “If a Republican governor did this, we Democrats would be calling for impeachment.”
Stamford, where Malloy, a Democrat, was mayor before he became governor, is home to hedge fund SAC Capital Advisors LP, run by billionaire Steven A. Cohen. The city is about 13 miles (21 kilometers) from Westport, where Bridgewater oversees about $130 billion in assets.
The Bridgewater project is expected to be completed in 2017, subject to regulatory approvals, according to Malloy’s office. State financial support will come from the Economic and Community Development Department. James Watson, a spokesman, said part or all of the $25 million loan to help pay for construction won’t have to be repaid “if certain job-retention and creation requirements are met.”
Bridgewater agreed to create as many as 1,000 “high- level” jobs within 10 years, while retaining its current workforce, according to Malloy’s office. The company employs 1,225 people in Westport.
“To have a company of Bridgewater’s stature make the business decision to invest $750 million in our state and significantly increase its workforce is not only an extraordinary economic win, but signals to the rest of the world that Connecticut is strengthening its leadership position in the very competitive financial services sector,” Malloy said in the statement.
Company managers and Malloy share a “vision of creating a state-of-the-art and environmentally sustainable” headquarters that will restore the city’s waterfront from past industrial uses, Greg Jensen, co-chief executive officer, said in the statement from Malloy’s office.
“A lot of work needs to be done to see if a move to the Stamford campus can become a reality,” Lindsay Fetzner, a Bridgewater spokeswoman at Prosek Partners, said by e-mail. “We will continue to work with our team of skilled partners to evaluate and plan the campus and will make our decisions known as we make them.”
The new buildings will “facilitate creativity, collaboration and help reinforce Bridgewater’s distinct culture,” Jensen said. The hedge-fund firm is known for a workplace governed by a voluminous set of management principles created by Dalio, 63, and posted on the company website.
Dalio, who grew up in Manhasset Hills on New York’s Long Island, started Bridgewater in 1975 in his New York apartment and built it into the world’s largest hedge-fund firm, with about $77.6 billion in assets as of January, according to Bloomberg News research. A 1973 Harvard Business School graduate, Dalio was the best-paid U.S. hedge-fund manager last year, according to AR Magazine, an industry publication.
Malloy, who served 14 years as Stamford’s mayor, said Bridgewater is one of eight companies, including Deloitte LLP and NBC Sports Group, that are participating in his development initiative. The Legislature passed a measure authorizing the program last year.
The governor has previously taken steps to keep financial- services jobs in the state. In August 2011, he announced a five- year agreement with UBS AG to keep at least 2,000 of the company’s 3,500 workers in Stamford. In exchange, Switzerland’s biggest lender got a $20 million forgivable loan.
Connecticut, which is the wealthiest U.S. state, is a hedge-fund mecca. Many are based in Fairfield County, which surrounds Stamford and such wealthy enclaves as Greenwich and Darien and abuts New York’s suburban Westchester County.
Malloy’s predecessor, Republican Jodi Rell, started a campaign in 2010 to lure hedge funds from New York after that state approved a measure to increase taxes on their highly paid managers. The step was later retracted.
While the Stamford area is wealthy, Fairfield County is also home to Bridgeport, where the metropolitan area encompasses the largest gap between rich and poor in the country. If the region were a country, it’d be the world’s 12th-most unequal in terms of income, ranking just below Guatemala.
“This is an insult to anyone in Stamford who may not be one of the 1,000 to get a well-paid job at this hedge fund,” said Dana Baliki, a local organizer for the Occupy Wall Street movement.
“It’s hard for me to believe that a billionaire needs a tax break for his firm,” Baliki said. “These are the skewed priorities taking this country down. The money could have been directed towards education, housing and community needs.”