At Bridgewater Associates, the world's largest hedge fund, there are few secrets.

All meetings are filmed, and the footage is available to everyone in the company. Employees rate each other's performance with proprietary iPad apps, and they can be fired for criticizing colleagues behind their backs rather than to their faces.

This culture of "radical transparency" was established by founder and chairman Ray Dalio and captured in "Principles," a manual of 210 lessons that all employees must read.

While Dalio credits this unique philosophy for much of Bridgewater's success — it manages $169 billion in assets — over the past few years he has been gradually backing away from management responsibilities while remaining active in investment strategy.

As part of a 10-year succession plan beginning in 2011, Bridgewater announced in March that it had recruited a new co-CEO: former Apple executive Jon Rubinstein. Dalio also used the opportunity to challenge the media's portrayal of Bridgewater, indirectly referring to The Wall Street Journal's February report about tensions between Dalio and co-CIO and former co-CEO Greg Jensen.

Business Insider asked Dalio by email to elaborate on the ways he considers Bridgewater's culture to be misunderstood, how he's putting systems in place to carry on his vision, and why Rubinstein's experience working with Steve Jobs, the late Apple CEO, made him an ideal addition to the team.

Richard Feloni: When did you develop the first iteration of your "Principles"? What served as your inspiration?

Ray Dalio: I started writing my investment principles down in the early 1980s and my management principles in the mid-1990s.

I found that whenever I encountered a situation, rather than just reacting to it, it was tremendously useful to think carefully about how I should react to it and other situations like it. Besides providing me with more thoughtful responses in each of these cases, approaching things this way provided me and others with guidance on how to deal with similar situations when they came up in the future.

Then I found out that I could put this guidance into computer code so that the computer could take in data and process it in the same way my brain did. This was key to improving our decision-making and led to the creation of our investment processes.

Over time, it also became important for me to share my management principles with the people I worked with because we had to agree on how we should be with each other — and that way is unique. Because the logic behind being radically honest and radically transparent with each other wasn't clear, it had to be spelled out in these principles. This became especially important in the mid-2000s, when Bridgewater grew quickly and we had a lot of new managers who wanted to know how to manage in a way consistent with our unique culture.

The text you can find today online is the product of my doing that.

Feloni: What are the benefits of a culture of radical transparency? What are some difficulties?

Dalio: Being radically transparent is tremendously beneficial for several reasons.

To be successful, we need everyone to think independently and work through disagreement to decide what's best. We call this an "idea meritocracy." And radical transparency is critical to having an idea meritocracy because it shows what's actually happening without spin and prevents people from maneuvering politically behind each others' backs. It brings problems and weaknesses to the surface and allows people to see how they are dealt with, so it's great for training people on how to deal with real problems.

It also allows everyone to express their thoughts about what's going on, which enhances two-way communication, yields better ideas, and ties employees to the mission of the company. Radical transparency fosters goodness in so many ways for the same reasons that bad things are more likely to take place behind closed doors.

The biggest challenge is that it can make people uncomfortable to have their mistakes and weaknesses so transparently shown. Since everyone has weaknesses, that experience happens to everyone who comes into this culture. Some people come to love it because they find learning about their weaknesses to be invaluable. It helps them guardrail themselves against their weaknesses, and they can be more themselves because they don't have to continue to hide their mistakes and their weaknesses.

As Harvard developmental psychologist Robert Kegan, who has studied Bridgewater, says, in most work places everyone is working two jobs. The first is whatever their actual job is; the second consists of managing others' impressions of them, especially by hiding weaknesses and inadequacies — which is an enormous waste of energy. In our culture, the idea is that everyone can just be comfortable being themselves, which is way more efficient in the long run.

The other big problem is how easily what we are doing can be misunderstood. It can sound mean, crazy, or like a cult to people who don't know what it's really like. Some people describe it as being like an intellectual Navy SEAL. Others describe it as being like spending time with the Dalai Lama to obtain self-discovery. To me, it's a wonderful community of people who bust their asses to be excellent.

But to read some of the distorted, sensationalized pictures you see in the media, you would think we're running an insane asylum.

Feloni: What are some of the biggest challenges the typical new employee faces while adapting to life at Bridgewater?

Dalio: Most people have a hard time confronting their weaknesses in a really straightforward, evidence-based way. They also have problems speaking frankly to others. Some people love knowing about their weaknesses and mistakes and those of others because it helps them be so much better, while others can't stand it. So we end up with a lot of people who leave quickly and a lot of people who wouldn't want to work anywhere else.

The person who flourishes here likes learning more than knowing and recognizes that the best learning comes from making mistakes, getting good feedback, and improving as a result of it. This requires people to be very humble and very open-minded because they realize that what they know is small in relation to what there is to know — and that what they don't know is what can really hurt them.

It's also a great place for people who like being thrown into a rapidly changing place with plenty of ambiguity.

Feloni: How do you define a personality type that is right for Bridgewater?

Dalio: We have a saying that "it takes all types to make a team." For example, some people who are creative are not reliable and vice versa; some see big pictures while others see details, etc. All of them are important to have on well-orchestrated teams. So we look for people with a wide range of thinking types who are self-reflective and can work together in an open-minded way.

Feloni: What do you consider to be the public's most glaring misconception about Bridgewater's culture?

Dalio: That it's a crazy and cruel place rather than a sensible and caring place.

When people only get little pieces of what we do here — things like looking at all mistakes and weaknesses openly, recording all of our meetings, having "baseball cards" for our people — without the higher-level goals behind these things, it's understandable that we seem strange.

Frankly, this is the most wonderful way of operating for people who want to be as effective as possible, so I wish it were better understood.

Feloni: Why did you decide to embark on a 10-year management-transition process? How are you ensuring that your management philosophy stays intact both through and following this process?

Dalio: Ten years might seem like a long time, but it actually seemed about right to us given that transitioning a founder-led, entrepreneurial company — especially one with a strong culture — is one of the hardest problems in business.

It was also a problem I've never encountered before, and because I've always been someone who learns through experience, I figured it would take me and others a lot of experimentation to determine what worked and what didn't.

We also knew going in that this wasn't going to be a one-to-one transition but a one-to-many, and we expected that selecting and building out the right team would take some time.

While I believe strongly that our unique management philosophy is one of the major reasons behind our unique success, I also believe that everyone needs to think independently and make their own decisions on what makes the most sense. And so my goal for these years has been to clearly articulate my philosophy and create tools for helping people practice it with the knowledge that when I'm no longer involved, it will be up to others to determine how useful these things are in running the company.

In the end, what matters most is that the people you work with share your values, so I've wanted people who value the meaningful work and meaningful relationships that always motivated me in building Bridgewater.

Feloni: What assured you that Jon Rubinstein was right for the role of co-CEO?

Dalio: There are two things I look for when assessing people.

First, do we share similar values of producing greatness through thoughtful disagreement? Jon worked next to Steve Jobs for 16 years doing that, and he clearly wants to do that with us.

Then I look at the skills we need. Jon has a world-class track record as both a leader of people and a shaper of technology, both of which we need.

Feloni: You've said that one of your major initiatives is "to continue building out the systematized decision-making" used in your investments and extend that to management. What does that entail?

Dalio: In our investment area, we've worked over decades to encode our best investment decision-making rules into computerized systems. This systematization allows us to refine the decision-making process and to compound our understanding to a degree that otherwise would be impossible.

To give you an idea of how such a system works, think of a GPS. Imagine what it would be like to have a GPS-like device that converts high-quality decision-making principles into formulas. It then processes data representing what is happening in the world and spits out recommended decisions. This is how our economic and investment thinking works. We are now doing the same things for management.

Feloni: You told clients that you're learning a lot as you move forward with the succession process. What have the biggest lessons been? Does Bridgewater's size make it more difficult to adapt quickly?

Dalio: We've learned a great amount about the key members of our team — Greg Jensen, Bob Prince, Eileen Murray, David McCormick, Osman Nalbantoglu, and me — not only about our strengths and weaknesses, but about their devotion to the organization and its mission.

These people deeply understand our mission and share our values, and they have shown themselves to be more committed to making Bridgewater great than to any ego-driven attachments to particular roles and responsibilities.

There are many other key people at all levels of the organization who are the same way, and we've also found great new people who understand our mission, like Craig Mundie and Jon Rubinstein.

The way we're constantly evolving and refining what we're doing can be very confusing to outsiders, especially when they read the typical business press, which attaches a lot of sensational drama to these kinds of things. But to us, this is just the natural way a group of close partners figures out how to be most effective together.

We've also learned a lot about how to build a governance system that's consistent with our idea-meritocracy so that we can disagree and resolve disagreements well.

Feloni: Do you think we will see more firms with cultures similar to Bridgewater's?

Dalio: I think that it's inevitable. With the rapid advancement of technology, radical transparency is coming at all of us fast, so everyone will need to think about how best to deal with it.

It can be terrible or terrific. I think that people will increasingly appreciate how terrific it is. I also believe that idea meritocracies and computerized decision-making are coming at us fast and are fantastic.

If people are interested in knowing more about our way of making an idea meritocracy, that's really what "Principles" is about. I assume the book has been helpful because more than 2.5 million people have downloaded it, and I've received hundreds of thank-you notes for sharing it. To me, it's just the most logical and effective way to be.

But everyone has to decide for themselves what works for them and their organization.

SEE ALSO: The world's most successful hedge fund just made a big change — here's a look inside its unique culture

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Bridgewater Associates — the world's largest hedge fund, with $169 billion in assets — has recently undergone a notable shakeup.

Founder, chairman, and co-CIO Ray Dalio announced earlier this March that tech industry veteran Jon Rubinstein was signing on as one of Bridgewater's two co-CEOs, alongside Eileen Murray.

Rubinstein would take the place of Greg Jensen, who would give up his role of co-CEO, but remain co-CIO alongside Dalio.

It's a major step in the 10-year succession process that began in 2011, in which Dalio is handing off management responsibilities to focus solely on investing strategy.

Dalio explained to Business Insider why Rubinstein was an ideal fit for the job:

There are two things I look for when assessing people.

First, do we share similar values of producing greatness through thoughtful disagreement? Jon worked next to Steve Jobs for 16 years doing that, and he clearly wants to do that with us.

Then I look at the skills we need. Jon has a world-class track record as both a leader of people and a shaper of technology, both of which we need.

At Bridgewater, the company's roughly 1,500 employees abide by "radical transparency," in which nearly all meetings are filmed and archived for anyone to view, employees rate each other's performance in proprietary iPad apps, and criticizing colleagues behind their backs is a fireable offense. Dalio explained that, "because it can make people uncomfortable to have their mistakes and weaknesses so transparently shown," Bridgewater's "idea meritocracy" is not for everyone.

He was assured that Rubinstein could thrive in this culture because Rubinstein spent the 1990s and early 2000s as one of late Apple CEO Steve Jobs' top executives, and Jobs is remembered for his brutally honest management style.

And Rubinstein's long tech career, which includes a key role in developing the iMac and iPod, is a perfect fit for Bridgewater's reliance on increasingly sophisticated automated trading software.

When Dalio announced the recruitment of Rubinstein and Jensen's giving up of the role of co-CEO, he argued, without directly referencing it, that a Wall Street Journal report from February mischaracterized a dispute between him and Jensen, and that the hiring of Rubinstein was already in the works when they were settling a particular disagreement.

"In a nutshell, we concluded that it made the most sense to have Greg spend less time on management and more time on investments and that we needed to bring in an exceptional co-CEO with a strong tech focus to supplement the existing leadership,"Dalio wrote.

"The way we're constantly evolving and refining what we're doing can be very confusing to outsiders, especially when they read the typical business press, which attaches a lot of sensational drama to these kinds of things," Dalio told Business Insider. "But to us, this is just the natural way a group of close partners figures out how to be most effective together."

SEE ALSO: Ray Dalio, head of the world's largest hedge fund, explains his succession plan for Bridgewater and how its 'radically transparent' culture is misunderstood

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Bridgewater Associates' roughly 1,500 employees abide by a culture of "radical transparency."

At the Westport, Connecticut-based hedge fund — the world's largest, with $169 billion in assets — all meetings are filmed and with very few exceptions made available to employees. Employees rate each other's performance using proprietary iPad apps to publicly display averages in "baseball cards" for each person, and criticizing colleagues behind their backs will get you fired.

The foundation for this culture is founder, chairman, and co-CIO Ray Dalio's "Principles," a manual of 210 lessons that all employees must be intimately familiar with.

Dalio readily admits that the culture is not for everyone. In 2014, he told UVA's Darden School of Business professor Edward D. Hess that the attrition rate over an employee's first 18 months was 25%— that is, one in four employees didn't last over a year and a half.

In a recent interview with Business Insider, Dalio explained why it can be difficult adapting to his company's way of doing things:

Most people have a hard time confronting their weaknesses in a really straightforward, evidence-based way. They also have problems speaking frankly to others. Some people love knowing about their weaknesses and mistakes and those of others because it helps them be so much better, while others can't stand it. So we end up with a lot of people who leave quickly and a lot of people who wouldn't want to work anywhere else.

A person who does decide to stay, he continued, "likes learning more than knowing and recognizes that the best learning comes from making mistakes, getting good feedback, and improving as a result of it. This requires people to be very humble and very open-minded because they realize that what they know is small in relation to what there is to know — and that what they don't know is what can really hurt them. It's also a great place for people who like being thrown into a rapidly changing place with plenty of ambiguity."

Essentially, Dalio said, it doesn't take long for people to realize whether or not they want to work in a setting where there are few secrets among employees. But those who do decide to stay do so with an intense dedication to playing their part in Dalio's massive machine.

SEE ALSO: Ray Dalio, head of the world's largest hedge fund, explains his succession plan for Bridgewater and how its 'radically transparent' culture is misunderstood

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If a company's founder and head of recruiting have a meeting about the latter's lack of reliability, it would seem obvious that the discussion be kept behind closed doors.

But at Bridgewater, such a discussion would be filmed and the video readily available for any of the hedge fund's roughly 1,500 employees to view.

And that's what happened around four years ago when founder, chairman, and co-CIO Ray Dalio sat down with co-head of recruiting John Woody, who has held that position since 2009.

The Westport, Connecticut-based hedge fund is the largest in the world, managing $169 billion in assets, and Dalio credits much of its success to its culture of "radical transparency."

At Bridgewater, every meeting is filmed and stored in an internally public archive (with few exceptions) and employees use proprietary iPad apps to rate each other's performance. Average scores for these traits are listed on "baseball cards" for each employee. The culture is based on Dalio's "Principles," a collection of 210 lessons that all employees must be intimately familiar with.

For Harvard professors Robert Kegan and Lisa Laskow Lahey's new book "An Everyone Culture," Kegan spent time at Bridgewater's headquarters, where he was shown a meeting between Dalio and Woody in which Dalio chastised Woody for consistent reports about Woody's tendency to show up late for meetings, miss deadlines, and leave tasks incomplete.

Woody and Dalio let Kegan publish an excerpt of their heated conversation to illustrate transparency at work:

Dalio: He told you to deliver the daily updates. I told you to deliver the daily updates.

Woody: I'm in agreement about the daily updates. No question.

D: And so there are two issues. Not only aren't you getting the daily updates, but we have a chronic reliability issue. You cannot be trusted to do the things you're asked to do.

W: Um ... when you take it to that level, I disagree with you. But when we're talking about—

D: That's your problem.

W: Well, can we explore that?

D: Yes, of course!

W: Because I think I take on massive amounts of responsibility and deliver on all of them. There are certain things that—

D: No, you don't. It's become a joke, about your reliability, and your reliability grades. You're given assignments, you don't do it. You are given the daily updates. You're asked to do stuff. This is your problem. You don't embrace your problem.

Woody, who has been with Bridgewater since 2005 and spent two years as Dalio's chief of staff, told Kegan that he remained angry and defensive for a few weeks after that meeting. In retrospect, he realized that, to use a phrase from "Principles," Dalio had successfully "touched the nerve."

"Here, we pride ourselves on being logical and facing the truth, but my initial response was, 'You're wrong!' which is me already being illogical, because I'm not even asking him why he thinks I'm unreliable," Woody said.

Woody's talent and drive were not questioned, which is why Dalio decided to help him improve rather than get rid of him. Again, this was someone that Dalio trusted both as a confidante and as one of the people in charge of building the Bridgewater team.

Woody explained that Dalio and his colleagues continued to point out his chronic unreliability during this time, and eventually, he started to "come to a realization that not only is it a problem for me professionally, but it's actually been a problem for me personally all the way back to the time where I'm eight years old." There was no splitting of work and personal lives in this consideration, and, in the interest of radical transparency, childhood memories were fair game.

The issue was resolved when Woody stopped being defensive and decided to establish new goals and habits related to his behavior. Since then, he told Kegan, he's paused longer before making a promise, visualizes his workflow for a project, checks in more frequently with his colleagues, and makes better use of his team.

In a recent interview with Business Insider, Dalio said that it's no secret that Bridgewater's culture is not a fit for everyone. As of 2014, a full 25% of new recruits didn't stay longer than 18 months. But those who do stay and rise through the ranks as Woody did, Dalio said, embrace the habit of sometimes brutal honesty intended to uncover weaknesses.

"It can sound mean, crazy, or like a cult to people who don't know what it's really like," Dalio said. "Some people describe it as being like an intellectual Navy SEAL. Others describe it as being like spending time with the Dalai Lama to obtain self-discovery. To me, it's a wonderful community of people who bust their asses to be excellent."

Excerpts reprinted by permission of Harvard Business Review Press. Excerpted from "An Everyone Culture: Becoming a Deliberately Developmental Organization" by Robert Kegan and Lisa Laskow Lahey. Copyright 2016. All rights reserved.

SEE ALSO: Ray Dalio, head of the world's largest hedge fund, explains his succession plan for Bridgewater and how its 'radically transparent' culture is misunderstood

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Bridgewater Associates — the world's largest hedge fund, with $169 billion in assets under management — is in the midst of a major leadership transition.

In 2011, its founder Ray Dalio initiated a 10-year transition plan in which he would gradually hand over people management power so he could solely focus on his role as co-CIO.

By 2022, Dalio plans to be monitoring Bridgewater's investments, but without running his firm's Westport, Connecticut headquarters.

In a recent interview with Business Insider, Dalio said that because the culture of radical transparency he's created is unique, it has not been an easy process — but that doesn't mean it's been chaotic.

Most importantly, he said, it's been a learning experience, where he's discovered that in order for Bridgewater to outlive him yet retain his vision, he's needed to focus his executive team's responsibilities onto their strengths and to automate his management philosophy through standardized processes that don't require his presence in the office.

He mentioned that it's already improved the efficiency of his executive team: co-CIO Greg Jensen, co-CIO Bob Prince, co-CEO Eileen Murray, president David McCormick, management committee member Osman Nalbantoglu, and himself.

"We've learned a great amount about the key members of our team ... not only about our strengths and weaknesses, but about their devotion to the organization and its mission," Dalio said. "These people deeply understand our mission and share our values, and they have shown themselves to be more committed to making Bridgewater great than to any ego-driven attachments to particular roles and responsibilities."

"The way we're constantly evolving and refining what we're doing can be very confusing to outsiders, especially when they read the typical business press, which attaches a lot of sensational drama to these kinds of things," he explained to Business Insider. "But to us, this is just the natural way a group of close partners figures out how to be most effective together."

In addition to hiring Steve Jobs acolyte Jon Rubinstein as co-CEO in place of Jensen (who remains with the team as co-CIO), Dalio also recruited Microsoft veteran Craig Mundie to serve alongside him as co-chairman. It's another decision that shows he is leaving management responsibilities to not only his most trusted investors but technology experts as well, because Bridgewater is reliant on automated investing.

As part of the 10-year transition, Dalio and his leadership team have also been determining ways to structure and automate the values in his "Principles" management guide, in the same way that he's automated his investing strategies. At Bridgewater, employees have proprietary apps on their iPads that allow them to rate each other's performance and make note of tensions, with the intention of resolving disagreements quickly, systematically, and transparently.

"Ten years might seem like a long time, but it actually seemed about right to us given that transitioning a founder-led, entrepreneurial company — especially one with a strong culture — is one of the hardest problems in business," Dalio said.

"While I believe strongly that our unique management philosophy is one of the major reasons behind our unique success, I also believe that everyone needs to think independently and make their own decisions on what makes the most sense. And so my goal for these years has been to clearly articulate my philosophy and create tools for helping people practice it with the knowledge that when I'm no longer involved, it will be up to others to determine how useful these things are in running the company."

SEE ALSO: Ray Dalio, head of the world's largest hedge fund, explains his succession plan for Bridgewater and how its 'radically transparent' culture is misunderstood

Join the conversation about this story »

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Bridgewater Associates is the largest hedge fund in the world.

It's also known for an intense corporate culture of radical truth and radical transparency.

"I'm sure our reputation on the Street is that we're completely insane," one employee told New York magazine's Kevin Roose back in 2011.

That reputation comes from the top.

In his legendary manifesto, "Principles," Bridgewater founder Ray Dalio asks, among other things, that employees "humiliate themselves" in pursuit of truth, and he also compares the process of self-improvement to "when a pack of hyenas takes down a young wildebeest," Roose reports.

It's an understatement to say that Bridgewater Associates is not right for everyone. So how do they find the perfect young hyenas for the job? That starts with a grueling interview process.

"We ask people questions that actually don't have a right or wrong answer, such as: Should there be a market for transplant organs?" Dalio tells Bloomberg. "The answer doesn't really matter. It's totally great if the person's thinking on the subject ends in a different place than the beginning, because moving forward together to get at the best answer is more important than being right from the outset."

We sifted through reports from Glassdoor to find some of the diciest, trickiest, and most intense interview questions Bridgewater could throw your way. Whether you're applying to be a summer associate or a manager (or just looking to spice up your conversation at dinner parties), here are a few questions worth mulling over in advance:

This is an update of an article originally written by Rachel Sugar.

SEE ALSO: Ray Dalio, head of the world's largest hedge fund, explains his succession plan for Bridgewater and how its 'radically transparent' culture is misunderstood

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Ray Dalio took home $1.4 billion last year through his hedge fund Bridgewater Associates, according to Institutional Investor's annual list of the top-earning hedge fund managers, released Tuesday.

Dalio ranked third in 2015, behind Citadel's Ken Griffin and Renaissance Technologies' Jim Simons, who both made $1.7 billion.

Bridgewater is the world's largest hedge fund, with $169 billion in assets under management, and is in the midst of a major leadership transition.

In 2011, Dalio initiated a 10-year transition plan in which he would gradually hand over people management power so he could solely focus on his role as co-CIO.

By 2022, Dalio plans to be monitoring Bridgewater's investments, but without running his firm's Westport, Connecticut headquarters.

In a recent interview with Business Insider, Dalio said that because the culture of radical transparency he's created is unique, it has not been an easy process— but that doesn't mean it's been chaotic.

Most importantly, he said, it's been a learning experience, where he's discovered that in order for Bridgewater to outlive him yet retain his vision, he's needed to focus his executive team's responsibilities onto their strengths and to automate his management philosophy through standardized processes that don't require his presence in the office.

He mentioned that it's already improved the efficiency of his executive team: co-CIO Greg Jensen, co-CIO Bob Prince, co-CEO Eileen Murray, president David McCormick, management committee member Osman Nalbantoglu, and himself.

"We've learned a great amount about the key members of our team ... not only about our strengths and weaknesses, but about their devotion to the organization and its mission," Dalio said. "These people deeply understand our mission and share our values, and they have shown themselves to be more committed to making Bridgewater great than to any ego-driven attachments to particular roles and responsibilities."

"The way we're constantly evolving and refining what we're doing can be very confusing to outsiders, especially when they read the typical business press, which attaches a lot of sensational drama to these kinds of things," he explained to Business Insider. "But to us, this is just the natural way a group of close partners figures out how to be most effective together."

In addition to hiring Steve Jobs acolyte Jon Rubinstein as co-CEO in place of Jensen (who remains with the team as co-CIO), Dalio also recruited Microsoft veteran Craig Mundie to serve alongside him as co-chairman. It's another decision that shows he is leaving management responsibilities to not only his most trusted investors but technology experts as well, because Bridgewater is reliant on automated investing.

As part of the 10-year transition, Dalio and his leadership team have also been determining ways to structure and automate the values in his "Principles" management guide, in the same way that he's automated his investing strategies. At Bridgewater, employees have proprietary apps on their iPads that allow them to rate each other's performance and make note of tensions, with the intention of resolving disagreements quickly, systematically, and transparently.

"Ten years might seem like a long time, but it actually seemed about right to us given that transitioning a founder-led, entrepreneurial company — especially one with a strong culture — is one of the hardest problems in business," Dalio said.

"While I believe strongly that our unique management philosophy is one of the major reasons behind our unique success, I also believe that everyone needs to think independently and make their own decisions on what makes the most sense. And so my goal for these years has been to clearly articulate my philosophy and create tools for helping people practice it with the knowledge that when I'm no longer involved, it will be up to others to determine how useful these things are in running the company."

SEE ALSO: Ray Dalio, head of the world's largest hedge fund, explains his succession plan for Bridgewater and how its 'radically transparent' culture is misunderstood

Join the conversation about this story »

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FBI Director James Comey told the House Oversight and Government Reform Committee Thursday, on the subject of the investigation into Hillary Clinton's handling of classified information, that he was "a big fan of transparency."

When he was an executive at Bridgewater Associates, the world's largest hedge fund, from 2010 to 2013, he was enmeshed in a culture of "radical transparency" unlike that of any organization of its size.

In a new Politico article by Garrett M. Graff, Comey offers insight into his time at Ray Dalio's hedge fund, including a strange scenario where a 25-year-old employee confronted him after a meeting. Graff writes:

"It was just weeks after he joined Bridgewater — whose corporate culture of high-achieving intellectuals resembles a moneyed management cult that shares more in common with the 1970s personal-improvement fad est than it does with a typical Wall Street firm — that Comey was cornered by a similarly new 25-year-old employee. The junior associate interrogated the former Justice Department official on a seemingly illogical stance that Comey had taken in an earlier meeting. 'My initial reaction was "What? You, kid, are asking me that question?" ... I was deputy attorney general of the United States; I was general counsel of a huge, huge company. No 25-year-old is going to ask me about my logic,' he recalled. 'Then I realized "I'm at Bridgewater."'"

Dalio founded Bridgewater from his apartment in 1975 but didn't begin developing his intense management culture until the mid-1990s, he told Business Insider in March. He found that codifying his investment principles brought him success, and so he should do the same with the way he wanted his company run. It resulted in "Principles," a manual of 210 lessons that all Bridgewater employees must learn.

Here's a primer on what it's like to work at the hedge fund:

Comey told Politico it took him three months to adjust to Bridgewater, at which point he appreciated the hardline culture. In a video testimonial on Bridgewater's website, Comey said, "You combine that intelligence, the depth and the almost 360 [degree] vector of the questioning, there is no more demanding, probing, questioning environment in the world than Bridgewater."

You can read the full Politico story online »

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Bridgewater Associates has fired back at The New York Times for its recent story on the company's culture, "At World's Largest Hedge Fund, Sex, Fear and Video Surveillance."

"Although we continue to be reluctant to engage with the media, we again find ourselves in the position of being left with no choice but to respond to sensationalistic and inaccurate stories, both to make clear what is true and to do our part in fighting against the growing trend of media distortion," the company said in a statement.

"To let such significant mischaracterizations of our business stand would be unfair to our hard-working employees and valued clients who understand the reality of our culture and values," the statement added.

It said that New York Times reporters Alexandra Stevenson and Matthew Goldstein "never made a serious attempt to understand how we operate" and that they weaved together disparate stories to create a sensationalized image of the $154 billion investment firm.

The Times story, which was published Tuesday, drew from a complaint with the Connecticut Commission on Human Rights and Opportunities, in which a 34-year old Bridgewater employee named Christopher Tarui, who is on leave, accused a superior of sexual harassment.

Bad things happen behind closed doors

Tarui said the company, which has a culture of "radical transparency" in which every meeting is recorded, tried to get him to withdraw his complaint. Intimidation is a focal point of the Times story, which also includes interviews with seven former employees and a filing with the National Labor Relations Board.

What seemed clear from the story was that Bridgewater's constant surveillance actually acted as a form of enforcing self-censorship. Bridgewater does not see it that way.

"The New York Times portrayed our taping of meetings as creating 'an atmosphere of constant surveillance ... that silence[s] employees who do not fit the mold.' It is well known that Bridgewater's taping of meetings is instead done to enable employees to hear virtually all discussions happening at the firm for themselves," the firm said in its statement.

It continued: "We make these tapes available to employees because we believe strongly that in order to have a real idea meritocracy, people need to see and hear things for themselves rather than through the spin of others. We also believe that bad things happen behind closed doors so that such transparency is healthy."

It also touted a recent anonymous employee survey in which "employees rated their agreement with the statement 'I believe that Bridgewater's culture and principles are key to its success' a 4.4 out of 5."

Bridgewater also said parts of the Times report were patently false. Specifically, it said employees were not sometimes asked to lock away their personal cellphones unless they were on the trading floor, in which case doing so is standard practice for the industry. It also said the firm had not lost billions because of performance.

Bridgewater sent us the full statement, originally published on LinkedIn:

Although we continue to be reluctant to engage with the media, we again find ourselves in the position of being left with no choice but to respond to sensationalistic and inaccurate stories, both to make clear what is true and to do our part in fighting against the growing trend of media distortion. To let such significant mischaracterizations of our business stand would be unfair to our hard-working employees and valued clients who understand the reality of our culture and values.

While we all would hope that we could count on the Times for accurate and well-documented reporting, sadly, its article "Sex, Fear, and Video Surveillance at the World's Largest Hedge Fund" doesn't meet that standard. In this memo we will give you clear examples of the article's distortions. We cannot comment on the specific case raised in the article due to restrictions we face as a result of ongoing legal processes and our desire to maintain the privacies of the people involved for fear that they too will be tried in the media through sensationalistic innuendos. Nonetheless, we can say that we are confident that our management handled the case consistently with the law and we look forward to its successful resolution through the legal process.

To understand the background of this story, you should know that the New York Times reporters never made a serious attempt to understand how we operate. Instead they intentionally strung together a series of misleading "facts" in ways they felt would create the most sensationalistic story. If you want to see an accurate portrayal of Bridgewater, we suggest that you read examinations of Bridgewater written by two independent organizational psychologists and a nationally-renowned management researcher. (See An Everyone Culture by Robert Kegan; Learn or Die by Edward Hess; and Originals by Adam Grant.)

Rather than being the "‘cauldron of fear and intimidation'" the New York Times portrayed us as, Bridgewater is exactly the opposite. Bridgewater is well known for giving employees the right to speak up, especially about problems, and to make sense of things for themselves. Everyone is encouraged to bring problems to the surface in whatever ways they deem to be most appropriate. To be more specific, our employees typically report their business problems and ideas in real time through a public "issue log" and a company-wide survey that is administered quarterly. More sensitive matters are reported through an anonymous "complaint line," and all employees have access to an Employee Relations team charged with being a closed, confidential outlet outside of the management chain for handling issues of a personal nature.

The New York Times portrayed our taping of meetings as creating "an atmosphere of constant surveillance . . . that silence[s] employees who do not fit the mold." It is well known that Bridgewater's taping of meetings is instead done to enable employees to hear virtually all discussions happening at the firm for themselves. We make these tapes available to employees because we believe strongly that in order to have a real idea meritocracy, people need to see and hear things for themselves rather than through the spin of others. We also believe that bad things happen behind closed doors so that such transparency is healthy.

While we acknowledge that this culture of openness is not for everyone, our employees overwhelmingly treasure this way of operating. In our most recent anonymous survey, employees rated their agreement with the statement "I believe that Bridgewater's culture and principles are key to its success" a 4.4 out of 5. Many of our employees say they wouldn't want to work anywhere else because they so appreciate our unique idea meritocracy in which meaningful work and meaningful relationships are pursued through radical truth and transparency. The New York Times article doesn't square with common sense. If Bridgewater was really as bad as the New York Times describes, then why would anyone want to work here?

The New York Times said that some employees "are required to lock up their personal cellphones each morning when they arrive at work" which made it sound like employees can't carry their phones around with them like employees at other companies do. This is wrong. The truth is that the vast majority of our employees freely carry around their cell phones; the only place they can't is on our trading floor, where cell phones are prohibited. This policy is to protect the confidentiality of trades in order to protect our clients' money.

The New York Times said that the company's culture makes it impossible for employees to have matters handled confidentially. That is also wrong. As stated above, we have clearly defined channels for reporting private matters that have been utilized by many employees over the years. These matters have always been kept confidential.

The New York Times said "over the last two years, the firm has lost billions of dollars for investors as a result of mixed performance." That is wrong as well. In 2015, our Pure Alpha fund had its 15th consecutive year of positive returns. This year, year-to-date, we have made $1.3 billion for our clients across our strategies. While that is less than expected, it is within our stated range of expectations. Notably, our clients who know us well have demonstrated their confidence in us by investing $12 billion in new assets over the last seven months.

Concerning legal matters, because Bridgewater is culturally committed to the pursuit of truth, we have always had a strong preference to not "settle" claims but rather to be judged by the appropriate legal or regulatory system, even though that is not the expedient thing to do. Like many organizations, we encounter frivolous claims made in an effort to extract financial gain. Most companies prefer to settle them because it saves time and legal costs—and avoids the sort of distorted publicity that we are now encountering. We choose to contest them instead. At the same time, we have clear policies and standards of behavior, and when we discover behavior inconsistent with them, we act decisively. We are proud to say that in our 40 year history we have had no material adverse judgments.

We are far from perfect and we like to raise our imperfections to the surface so that we can deal with them honestly and transparently, while also protecting personal privacy. This approach is controversial and gives the media a lot of material to pick from to mischaracterize, but we believe that in the long run it is the best way for improving. It has been the biggest reason for our success. We look forward to continue being judged by our employees, our clients, and the legal and regulatory parties who are responsible for overseeing our behaviors, rather than by the media.

SEE ALSO: Ray Dalio, head of the world's largest hedge fund, explains his succession plan for Bridgewater and how its 'radically transparent' culture is misunderstood

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People have been talking about Bridgewater Associates and its culture of surveillance for years, and in general it has been met with skepticism and derision.

That has been the case again over the last few days. The $154 billion investment firm helmed by Wall Street legend Ray Dalio has yet again been confronted with decidedly bad press about its corporate culture.

In a New York Times story published on Tuesday called "At World's Largest Hedge Fund, Sex, Fear and Video Surveillance," reporters detail the firm's efforts to squash a sexual harassment claim now making its way through the Connecticut Commission on Human Rights and Opportunities.

Bridgewater called this story a "distortion of reality"— but only part of it. The firm has always proudly owned the part of its culture where everything is recorded, either on audio or video, in the name of what its founder calls "radical transparency."

According to the "principles" Dalio has also set out for the company, this is also supposed to encourage an environment in which people challenge each other's ideas and feel that there's an open dialogue.

Here's an example, from the New York Times report:

"It is routine for recordings of contentious meetings to be archived and later shown to employees as part of the company’s policy of learning from mistakes. Several former employees recalled one video that Bridgewater showed to new employees that was of a confrontation several years ago between top executives including Mr. Dalio and a woman who was a manager at the time, who breaks down crying."

Dalio has argued that this allows problems and weaknesses to rise to the surface and be dealt with objectively.

To me, the use of this logic is even scarier than the surveillance itself.

In the last few years researchers have learned more and more about the powerful connection between surveillance and silence, minority opinions, and self-censorship. For that we can thank Edward Snowden, the former NSA employee who leaked details about Prism, a far-reaching clandestine surveillance program designed to ensnare terrorists.

What the program's leak did was bring a crucial discussion about the nature of privacy in America — a discussion about what is and what is not acceptable within our values construct — to the the forefront of public discourse.

Had Bridgewater's culture been thrown into that conversation, it would have undoubtedly been judged outside of acceptable American privacy norms.

Bridgewater is not what we are; it's what millions of Americans fear we might become.

Silence scholarship

The selling point of the NSA's Prism program was simple — it's meant to keep us safe. In exchange for an invasion of privacy, Americans are supposed to believe that their lives may be spared from violence.

Yet according to Pew research, only 40% of Americans back the program. Being spied on is something we just don't like. Those that are OK with it, though, tend to take the "nothing to hide" argument. They don't care if the government is watching them because they don't care what the government sees.

This line of thinking was tackled in the San Diego Law Review in 2007 by DJ Solove. He said that people need privacy not because they have things they want to hide, but because they are concerned with "concealing information about themselves that others might use to their disadvantage."

That can include anything from when your kids will be with a babysitter to when you plan on going the dentist's for a root canal.

But again, 40% of Americans are willing to set this fear aside because they feel their lives are in danger. At Bridgewater, the rationale for surveillance is obviously thinner. It's sold as a part of a corporate culture — one that pays very handsomely.

More research tells us that this dedication to surveillance does not breed a culture of openness, but rather one of fear and suppression.

In a study published earlier this year called "Under Surveillance: Examining Facebook’s Spiral of Silence Effects in the Wake of NSA Internet Monitoring," Elizabeth Stoycheff examined what surveillance does to speech.

"Theoretically, it adds a new layer of chilling effects to the spiral of silence," Stoycheff wrote. "This is the first study to provide empirical evidence that the government’s online surveillance programs may threaten the disclosure of minority views and contribute to the reinforcement of majority opinion."

Asymmetrical information and asymmetrical power

Now consider the power dynamics at Bridgewater. Instead of the government watching you, it's your boss. Stoycheff's subjects silenced their opinions because they perceived there may be retaliation. But in reality, the government was/is far more disconnected from these people than, say, their employers.

Your employer can really mess with you.

Stoycheff's study found that people don't speak up for fear of two things. One is social isolation. Applied to Bridgewater, in the gentlest way, think of this as being afraid no one will hang out with you at the office holiday party.

The other fear is one Bridgewater can conjure far more easily than the government can.

"Fear of isolation, as traditionally measured, taps an individual's concern of being alienated from other members of society, but does not address fear of alienation or prosecution from the government. Csikszentmihalyi (1991) argues that social isolation is a minimal concern compared to material sanctions that government is capable of enacting, like losing one's job or instigating legal consequences," Stoycheff writes (emphasis ours).

It goes without saying that the powers that be at Bridgewater have their employee's livelihoods hanging directly in the balance. Legal consequences are also on the table. Radical transparency serves as a reminder that what is being said is also being judged, and judgments have consequences.

This is how fear, though it is often imperceptible to the naked eye, is silently passed from one person to another like a message sent through a cold tin can. This is fear dancing on an invisible wire, regulating every employee with the same subliminal message.

It says: "Do not speak unless you agree."

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The world's biggest hedge fund thinks that the next radical change in central-bank policy is almost upon us.

Bridgewater Associates sent a note to clients on Wednesday written by Greg Jensen, Jason Rotenberg, and Jeff Amato. Jensen is Bridgewater's co-CIO and former co-CEO.

The note said that central-bank policies up until now — such as dropping interest rates and quantitative easing — haven't boosted economies enough. Policy makers need to try something radical: putting money directly into consumers' hands.

Here's the key passage from the note, which was obtained by Business Insider (emphasis added):

"The world is not transpiring as most central bankers had expected. They have had to consistently adjust their thinking about what interest rates and monetary policies are appropriate, and they have had to be more accommodative than they had expected and buy more 'risky' assets. We believe that at this stage either fiscal stimulation that is monetized or putting money directly into the hands of spenders (i.e., MP3) is the logical next move."

The note cites central-bank policy in Japan as an example of monetized fiscal stimulation. Here is the passage:

"Japanese policy makers, while being technically careful to not break the rules of independence between the [Bank of Japan] and the [Ministry of Finance], have moved forward in a practical way to create de-facto MP3 with fiscal stimulus indirectly financed by the BoJ and increased purchases of riskier assets. These moves should help on the margin in getting money into the hands of entities that will impact the real economy, but markets have been underwhelmed by the details."

Westport, Connecticut-based Bridgewater manages about $150 billion, excluding leverage.

The Wall Street Journal earlier this year wrote about tensions between Jensen, one of the authors of the note, and billionaire founder Ray Dalio. Dalio later told Business Insider that he believed that Bridgewater's culture is misunderstood.

Rotenberg is a Bridgewater analyst, according to a Bloomberg Terminal profile. Amato's position was not immediately clear. A representative for Bridgewater at external PR firm Prosek Partners declined to comment.

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Bridgewater Associates, one of the world's largest hedge funds, and perhaps the most recognisable name in the industry, has given the Bank of England's new stimulus package the thumbs up in a note circulated to clients.

Analysts from Bridgewater — which manages around $150 billion of assets globally — said in a note sent on Friday the actions of governor Mark Carney and the rest of the Monetary Policy Committee on Thursday were "appropriately aggressive" in trying to tackle the coming storm facing the British economy.

The bank cut interest rates to a historic low of just 0.25%, and launched a £70 billion programme of quantitative easing, including an unprecedented £10 billion dedicated to buying investment grade bonds from companies with substantial UK operations.

The rate cut was widely expected, with markets pricing an almost 100% chance of the cut happening, but the extension of bond buying, while not massively shocking, was not as widely expected.

Those actions, say Karen Karniol-Tambour and Melissa Saphier from Bridgewater, were the right way to go. Here's the extract from Bridgewater's analysis (emphasis ours):

"The Bank of England eased on Thursday, responding to the slowdown that is likely taking place in the UK following the Brexit vote. We think the BoE’s stimulation package was appropriately aggressive given today’s conditions, which present significant risks of “pushing on a string.” UK rates and spreads are already very low, though not as compressed as in Europe and Japan.

And like the ECB and the BoJ, which are struggling with easing effectively, the BoE is augmenting interest rate cuts and QE purchases of government bonds (which have limited effectiveness) with policies attempting to activate spenders in the economy more directly, by buying corporate bonds and offering cheap financing to banks. These are logical levers to use, given that the effectiveness of monetary policy is weak and the risks are asymmetric. That the BoE acted swiftly, before there was a chance for a downturn to become more entrenched, puts them in a better position as well."

Bridgewater's analysts also note the Bank of England's actions won't just have a positive impact on the British economy and markets, which is understandably the bank's focus, but also on global financial markets and conditions. While Brexit is obviously going to impact the UK economy in the most material and substantial manner, spillover effects are expected, although — in Europe at least — those effects seem not to have hit yet.

Here are Karniol-Tambour and Saphier once again (emphasis ours):

"Under such circumstances, the currency takes on a more prominent role as a lever of monetary policy, and the UK’s balance of payments conditions are conducive to a currency depreciation. Beyond the domestic impact, as the BoE’s money printing circulates through the financial system, the expansion in liquidity should on the margin have a favorable impact on global asset markets and conditions. The BoE’s moves represent another incremental step by developed world central banks to provide sufficient stimulation. There is now significant liquidity production from three of the world’s major central banks, and still a cautious attitude on the part of the Fed. This should reinforce the global move from cash to assets."

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For the last eight years, hedge fund investors have been paying high fees for lackluster performance. 

There are rare exceptions — this New York fund is crushing competitors— but for the most part, hedge fund managers have come up with layers of excuses for why they are performing so poorly.

It wasn't always this way.

Decades ago, there were only a few funds, catering to rich people in the know, and those investors were happy to pay high fees in exchange for high returns.

Now, it's a $3 trillion industry, and many of the investors are institutional pension funds. 

And, most importantly, what we call "hedge funds" has changed drastically. 

'Hedge' used to mean something

In the late 1940s, a journalist and sociologist named Alfred Winslow Jones had an idea. He decided to buy stocks using borrowed money to magnify his profits. He also bet against stocks, profiting if they lost value.

Jones "shorted" stocks, meaning he bet they'd go down.

He called this strategy "hedging"— and it was in 1949 that he turned this idea into an investment firm and what is thought to be the first hedge fund.

(Jones actually called it a "hedged fund.")

Jones' fund made mega money for his clients, usually rich families, and he became a legend on Wall Street. His firm gained 670% in the preceding 10 years, compared with a 358% gain for the leading mutual fund of that time, according to a 1966 Fortune article by legendary financial journalist Carol Loomis.

The firm still exists and is now run by Jones' grandson, Robert Burch IV.

Even as late as 1966, journalists like Loomis were putting the term "hedge fund" in quotes. The idea was still novel.

These days, the term has lost its quotes and also a lot of its meaning. In fact, some hedge funds don't hedge at all.

OK, so what's a hedge fund today?

It can be a lot of things.

There are hedge funds that act like mutual funds.

There are hedge funds that invest in only the arcane or the bizarre — like lawsuit funding or the right to develop the space above a building.

Some bet on trends in the world economy.

Others employ math geniuses with Ph.D.s to program computers to trade for them.

A hedge fund can be a guy in his basement or thousands of people in a headquarters in Connecticut.

So, what do hedge funds have in common? Not much other than that they're really expensive.

"Hedge funds are a fee structure — it's really the only defining factor," said Joe Marenda, a hedge fund consultant at Cambridge Associates.

Traditionally, hedge funds collect 2% of their clients' assets to run their operations. So if a rich person or a pension fund puts $100,000 in a hedge fund, then the fund collects $2,000 before it does anything.

This means huge hedge funds, even if they don't perform particularly well, can generate a hefty dose of income on the management fee alone, making the hedge fund business potentially very lucrative.

With that $100,000, the fund would then invest the remaining $98,000. If its value goes up, then the hedge fund gets to collect a lot more money: 20% of the original investment's gains. So, if it's worth $110,000 in a year, then the hedge fund keeps another $2,000.

But most hedge funds can't command that fee structure anymore. Investors have been asking for lower fees as performance has slumped and thousands of new hedge funds have entered the market. A closer estimate of what the average hedge fund gets paid is a 1.6% management fee and a 19.4% performance fee, according to Preqin, a data tracker. A startup hedge fund will most likely charge fees lower than that, managers say.

But compared with boring index funds — some charging fees as low as 0.05% — hedge funds are a lucrative business.

How do they do?

You'd think that if hedge funds are charging so much, then they ought to be performing far better than the stock market as a whole.

Sometimes they do, but overall, hedge fund returns have been rather lousy in recent years. This has led to frustration and anxiety among investors. So, hedge funds have started to market their purpose differently — highlighting that they may lose less money when markets tumble, rather than consistently outperform indexes like the S&P 500.

Many funds said that they could make money in good markets and bad, and indeed, some hedge funds profited even as markets tanked in the latest financial crisis. But performance since then has been lackluster, and even those that had performed well in the past have wavered.

Many investors worry that the bigger hedge funds are getting too big, chasing the same strategies and crowding one another out. This, to some extent, may have caused underperformance among the biggest hedge funds recently, according to a Barclays report.

Macro conditions — what's happening in the world economy — have become the common excuse of late. One notable hedge fund startup, Tourbillon Capital, named low interest rates, for instance, as one reason that its performance has dropped double digits this year.

And there are worries that hedge funds may not perform the way they used to. Since 2008, investors would have been better off in the boring old S&P 500 than the average hedge fund. 

Transparency issues

To many, hedge funds are mysterious and secretive. Some don't even have websites, and when they do, it's often a spartan home page. Until the financial crisis — and the Dodd-Frank Act — funds didn't even have to register with the government.

Even with registration, hedge funds usually disclose little about how they make their money, other than a general strategy summary in their public filings with the US Securities and Exchange Commission. For more detailed info, you have to ask the manager directly, which usually means that you have to be an investor.

But even then, the manager may not tell you. Hedge funds can be black boxes, offering only vague disclosures of how they invest their clients' cash. They might tell you that they put money into private companies but not how they value those investments. Or they may shift money around rapidly, giving investors no way to keep track of where their money is.

Hedge funds, like this one, will often say that they shouldn't even be compared to a benchmark index because their strategy is so distinctive. That same fund also requires investors to sign a confidentiality agreement to be able to see the full portfolio.

In addition, most hedge funds lock investors' money up for a period of time — usually a quarter of a year — but it could be up to several years. So if you don't like the way things are going, then you can't pull your money out all at once.

How do you invest?

If, after all that, with the expensive fees and mysterious strategies, you still want to invest in a hedge fund, then you probably can't — unless you're really rich.

These are the rules on how rich you have to be before you can invest in a hedge fund, according to the SEC:

• either you've earned more than $200,000 — or $300,000 together with a spouse — in each of the prior two years and reasonably expect the same for the current year, or
• you have a net worth of over $1 million, either alone or together with a spouse, excluding the value of your home

That's for individuals. But increasingly, it's big institutional investors piling into hedge funds: public pensions, college endowments, and foundations representing many middle-class Americans.

This has meant that hedge funds have also become more institutional in nature, hiring bigger compliance staffs and investor-relations teams to manage a broader investor base.

Some institutional investors are getting cold feet about hedge funds, seeing their high fees and paltry returns as not worth the risk and effort. The New York City Employee Retirement System, the city's pension for civil employees, and other big pensions decided to eliminate or reduce their hedge fund investments recently.

All hedge fund managers are rich, right?

Not necessarily.

It's no secret that hedge fund managers have become some of the world's richest people. They include billionaires George Soros, Steve Cohen, Paul Singer, Alan Howard, and Ray Dalio. Many of them make big political donations, on the left and the right, and manage money for some of the biggest pots of public money: public pensions.

But it's also inaccurate to say that every hedge fund manager makes bank.

Some estimates put the number of hedge funds at about 11,000 today. Most of them are small funds with a handful of people working there. The business isn't lucrative unless you can raise a lot of money from outside investors on top of performing well. Many don't.

On the other end is a firm like Bridgewater. With $150 billion in assets, it's the world's biggest hedge fund firm by far. The Westport, Connecticut-based Bridgewater employs about 1,700 people. Its founder, Dalio, took home $1.4 billion last year, making him only the third-highest-earning hedge fund manager for 2015, according to Institutional Investor's Alpha.

James Simons, of the secretive computer-driven Renaissance Technologies, and Ken Griffin, of the Chicago-based Citadel, tied for first, with $1.7 billion.

What else should I know?

Some hedge funds are run by "activist" investors. They try to change companies from within to boost their stocks' value. Bill Ackman, who runs Pershing Square Capital, has tried to change and influence companies like McDonald's and Herbalife.

Others, such as Cevian Capital in the UK, work more behind the scenes.

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Bridgewater isn't holding back.

"This series of videos that we've prepared for you are to give you a window into what it's like to be here, to scare you away if you're not the right kind of person, to potentially attract you if these ideas — if this way of being — is attractive for you," Greg Jensen, Bridgewater Associates co-CIO and 21-year veteran of the firm, said in a new video on Bridgewater's website, relaunched last week.

The video series reveals a surprisingly extensive amount of footage from within the company and even shows brief clips from recorded meetings, marking a big shift for the usually secretive hedge fund. Founder and co-CIO Ray Dalio even admits that its 18-month attrition rate is as high as 50% for new employees.

The relaunched site portrays Bridgewater in a new light: not scary and removed, but highly competitive and intriguingly unusual. The material has the feel of something a Silicon Valley giant like Facebook or Google, rather than a secretive hedge fund, would produce.

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Bridgewater is as well known for being the world's largest hedge fund — with $150 billion in assets and 1,700 employees — as it is for a unique culture that Dalio describes as being based on "radical truth" and "radical transparency."

Employees are encouraged to regularly dissect each other's thinking to determine the root of decision-making, to rate each other's performance using iPad apps, and to send an audio file to any person mentioned in a meeting — all meetings, with few exceptions, are digitally recorded with either audio or video. "Pain + Reflection = Progress" is a guiding phrase.

Dalio founded Bridgewater out of his apartment in 1975 and laid the foundation for its culture through the '80s, but it wasn't until he formalized his management approach in his guide, "Principles," made public in 2011, that the firm began regularly appearing in the media and facing scrutiny.

Critics have accused it of being "bizarre" and like a "cult;" in July, The New York Times published a story that highlighted a harassment claim by a former employee, including his allegation that the hedge fund was a "cauldron of fear and intimidation" (the employee later withdrew his complaint and moved to a new firm).

Dalio has consistently replied that his firm's culture is misunderstood, specifically calling that Times report a "distortion of reality."

The new recruiting material may be Bridgewater's biggest statement yet to defend how it operates.

Every week, employees at the world's largest hedge fund spend at least an hour with "management principles training" lessons (MPTs), where they analyze recordings of meetings and answer questions about what they observed.

Bridgewater Associates founder Ray Dalio implemented this process around 10 years ago as a way to further instill his unique management insights into his growing firm, which now has $150 billion in assets under management and 1,700 employees in its Westport, Connecticut offices.

Dalio founded his hedge fund out of his apartment in 1975, and in the '80s developed a culture of "radical truth" and "radical transparency," codified in his 2010 guide "Principles," which all employees must read. In this environment, the majority of meetings are recorded, via an opt-in audio recorder or camera, and any time employees mention a colleague not present, they are supposed to send the recording to that person. Some of these recordings become MPTs, if they contain a "teachable moment." Others are sent to share an important, informative meeting with the entire company.

It's a unique process all job candidates know they'll be getting themselves into, since Bridgewater shows a couple of examples during its application process. To learn how they worked and have been received, Business Insider talked to several former junior- and senior-level employees. We are refraining from sharing any identifying details of these former employees so as not to jeopardize their standing with the company.

SEE ALSO: Bridgewater just released a series of videos that looks like something Facebook or Google would produce

Getting to know Ray

The lessons are intended to take an average of 15 minutes each workday, but one source remembers spending anywhere from two to four hours each week on the lessons. This person said that if you ever pitched spending a few hours each week on office culture and management strategy to executives at a traditional financial firm, where this source also worked, they would "laugh you out of the room," but that Wall Street could actually benefit from more time spent on the topics.

MPTs typically consist of audio, video, or text from a meeting and/or relevant document followed by a survey, and can be completed in as little time as five minutes or as long as more than an hour. They are released in batches with deadlines, and some are released outside of batches under special circumstances. There may not be a "correct" response to the survey questions, but employees see the aggregate results after they submit their answers.

Any employee is subject to be featured in an MPT, though the majority feature the senior management team and a notable amount star Dalio. Dalio appears in so many, in fact, that one former employee told us that even though their job didn't put them in regular contact with Dalio, they felt as though they got to know him personally through the lessons.

Here are a few examples of actual MPTs, based on descriptions from sources:

1. Question your superiors

A junior-level employee meets with his manager regarding a problem he submitted in the company's issue log. He explains to his boss that he's concerned about working with third-party consultants to Bridgewater because they are not immersed in the Bridgewater way of doing things and he feels there is a culture clash. The boss explains that he and members of senior management already discussed this issue and reached a decision, and that it's not this employee's concern, anyway. They move on.

In a followup, the boss' own supervisor chastises him for the way he handled the previous situation. An employee with a problem should not be shut down, the supervisor explains. The first reaction should be to find out, "Is there truth here?" and work with the employee to get at the root of his position. Then, it's your duty to explain your decision-making to that employee. The supervisor explains that it's a manager's responsibility to encourage employee feedback, since a manager can lose track of how their actions are affecting their team.

The source who shared this story with us said that the initial interaction between the manager and his employee, where a boss tells his underling to respect his decision and roll with it, would have been normal at any other company where the person had worked.

2. Admit your weaknesses

A senior-level employee meets with Dalio. There has been some tension between them, but the employee begins explaining the ways that they have failed recently, and how this is tied to bigger-picture personal weaknesses.

This employee's self-assessment is shown as a positive example of one of the harder aspects of "Principles" in action. As Dalio writes in his guide:

"I call the pain that comes from looking at yourself and others objectively 'growing pains,' because it is the pain that accompanies personal growth ... Remember that: Pain + Reflection = Progress.

"Much as you might wish this were not so, this is a reality that you should just accept and deal with. There is no getting around the fact that achieving success requires getting at the root causes of all important problems, and people’s mistakes and weaknesses are sometimes the root causes. So to be successful, you must be willing to look at your own behavior and the behavior of others as possible causes of problems."

"We're in a world where bad things happen," said former Treasury Secretary Tim Geithner at CNBC's Delivering Alpha Conference on Tuesday.

On stage with him, billionaire investor Ray Dalio, founder of Bridgewater Associates, added that the world he's seeing today looks like the late 1930s.

With nationalism and the wealth gap becoming more powerful forces around the world, "it's very much like the late '30s, and it worries me," Dalio said. "But there is no period in time ... that is most analogous to now."

The persistence of low interest rates despite dramatic easing from central banks puts us in a world unlike any we've seen before, and Geithner and Dalio agreed that now is not the time to raise interest rates.

"I think people have this sense that our system can't deliver anything meaningful. ... If you want to take a more hopeful view of the world, we're working on the frontier of what's possible," said Geithner. "It's not true that the major governments are completely out of ammunition."

He said he thinks that raising rates just to replenish the arsenal is a "weird argument to make."

Dalio offered that he thought the Federal Reserve was putting too much emphasis on the business cycle and not enough on the debt cycle in its planning.

Geithner said that central banks could be more creative, but that the politics of such action were very difficult.

"We've never been in a world together that has been like this," said Dalio.

Indeed.

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Billionaire investor Ray Dalio told a hedge fund conference on Tuesday that the Federal Reserve doesn't need to raise interest rates now.

A note sent to Bridgewater Associates' investors on the same day further explains why the firm thinks the Fed should hold off.

The note warns that raising rates during a deleveraging, or selling off of debt, could crush the economic recovery.

"If it were us, we would not take the risk the Fed appears to be moving toward," the note said. "Cyclical conditions point modestly but not strongly toward tightening, and the secular backdrop screams that the risks of tightening prematurely outweigh the risks of falling behind."

Bridgewater's Greg Jensen, Phil Salinger, and Alan Keegan wrote the note, a copy of which was obtained by Business Insider. Bridgewater is the world's biggest hedge fund firm, managing about $150 billion in assets.

Historical precedent

In the note, Bridgewater flagged several cases of tightenings during deleveragings: the UK in 1931, the US in 1937, the UK in the 1950s, Japan in 2000 and 2006, and Europe in 2011.

"In nearly every case, the tightening crushed the recovery, forcing the central bank to quickly reverse course and keep rates close to zero for many more years," the note said. 

In those cases, markets have tended to tank, recoveries fade, and inflation drop.

More specifically, the average rate hike during a deleveraging "caused, over the next two years, a 16% drawdown in equities, a 2% increase in economic slack and a 1% fall in inflation."

The note continued:

"Looking at each case of tightening in a deleveraging reinforces the picture: in general, the tightenings are short-lived and unsuccessful, with the central bank quickly reversing course and keeping rates at zero for many years. Even in the most successful example of tightening in a deleveraging, the UK in the 1950s, the BoE hiked rates only modestly, despite roughly 7% of nominal growth with 4% inflation, such that there was no tightening in real terms."

On the other hand, in cycles where the economy was not deleveraging, "economic activity continued to strengthen, inflation kept edging up and asset returns stayed strong, allowing the Fed to keep tightening."

Bridgewater said that, if it were the Fed, it would not raise rates faster than what is priced in. That's because what is priced in is at a much slower pace than what the Fed has recently projected.

"Normally, a mistake in monetary policy is not that big a deal because it can be reversed," the note said.

"The risk now is higher than normal because a tightening mistake is harder to reverse today when the ability to ease is more limited."

Russell Sherman, a spokesman for Bridgewater at external public-relations firm Prosek Partners, declined to comment. 

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There will be "big, bad outcomes" if the European Central Bank prematurely reduces its bond-buying program designed to support the economy, according to Bridgewater Associates founder Ray Dalio and his colleagues.

Dalio and his colleagues Bob Prince, Karen Karniol-Tambour and Melissa Saphier sent a note to clients on Friday titled: "Tapering by the ECB would be very bad for Europe's economy, its assets, and its unity."

Business Insider obtained a copy of the note. In it, Bridgewater estimates the impact of the ECB reducing bond purchases. 

"The question of what the ECB monetary policy past March will look like is growing in importance as we move closer to that date," the note said. "Though Mario Draghi understandably side-stepped the question, it is the growing elephant in the room."

Bridgewater, the world's biggest hedge fund firm, estimates that a reduction of the ECB's bond purchases to zero over a year would reduce gross domestic product growth by about 1%. A taper would be the same as raising interest rates by about 1.25%, according to the note. The ECB would usually only raise interest rates when it's trying to contain a fiery economy and inflation. 

If the ECB tapers its bond buying, the euro would gain by between 5% to 10%, and inflation would fall by about 0.3% from about 1% today, the note said. 

"These figures are approximate," the note said. "Nonetheless, it's clear that it would lead to big, bad outcomes."

Earlier this month, Bloomberg reported that the ECB would probably wind down its €80 billion-a-month bond-buying program before the end of the overall stimulus package known as quantitative easing. The report unnerved investors, who had expected that the ECB would continue doing all it takes to combat low inflation.

But on Thursday, ECB President Mario Draghi said the bank has not discussed extending the easing program beyond the March 2017 end point.

He said the bank's "decisions in December" will give clarity on what it plans to do in the coming months, leaving investors in suspense until then. The euro slumped to the lowest level since March as Draghi spoke, suggesting that investors saw the possibility of a QE extension announcement in December.

Russell Sherman, a spokesman for Bridgewater at external public relations firm Prosek Partners, declined to comment.

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Around eight years ago, Bridgewater Associates founder Ray Dalio introduced Transcendental Meditation to his 735 employees.

Dalio had already established a unique, intense culture at Bridgewater that he likes to say is akin to being part of an "intellectual Navy SEALs," and he believed that Transcendental Meditation, or TM, would work as an effective counterbalance.

"I did it because it's the greatest gift I could give anyone — it brings about equanimity, creativity, and peace," Dalio told me in an email.

Since then, TM has popped into the mainstream, and over the last three years, the David Lynch Foundation TM center has taught almost 2,500 professionals — 1,150 in 2016 alone — and roughly 55% are from Wall Street.

Dalio has always done things differently, from having his employees memorize his list of life "Principles" or recording their conversations as part of a culture of "radical transparency." So his obsession with TM isn't surprising, but what is unusual is the way that it has caught on with the rest of Wall Street over the past few years.

Dalio began practicing TM in 1969 as a college student, after seeing that its founder, Maharishi Mahesh Yogi, taught it to the Beatles.

Dalio is also one of the biggest supporters of the David Lynch Foundation — founded by the acclaimed director ("Twin Peaks,""Mulholland Drive") in 2005 to teach TM for free to underserved students, veterans with post-traumatic stress disorder, and victims of domestic abuse — and has donated about $20 million to the DLF through the Dalio Foundation over the past decade, with funds specifically allocated to students in New York and San Francisco and veterans. The Dalio Foundation accounts for 20% of the DLF's funding.

I wanted to find out why Dalio would speak so emphatically and passionately about this meditation technique, and why other power players like Third Point manager Dan Loeb and JPMorgan wealth management CEO Barry Sommers were compelling others in finance to try it out.

And as someone who had been practicing mindfulness meditation for nearly a year, I was questioning the bureaucracy and mystery of TM, wondering if it was all a racket constructed over a simple, overblown technique.

Over the past six weeks, I spent hours talking to many people about their own experiences with TM, went through years of scientific studies conducted, dug into the organization that teaches it, and pored over the ancient literature and tradition that inspired the founder to develop and spread the technique.

Knowing I couldn't truly understand its appeal without experiencing the practice, I learned TM through the DLF and have practiced it for the recommended two 20-minute sessions every day, missing only a few sessions. The foundation offered to waive its $960 fee, which it had done with other journalists, so I'd have more context for my research.

Practitioners can go deep into the history of TM and even learn advanced techniques for deeper meditations, but at its heart, TM is a simple and effective technique, and those who stick to the basics can still see real results. It's one of the reasons hyper-busy, intense investors are embracing it.

Bob Roth, the foundation's executive director, and my teacher, Mario Orsatti, are thrilled by the rising interest, which surprises even them. Because of a number of coinciding factors — the recent cultural normalization of meditation in the US, public evangelizing by figures like Dalio and Jerry Seinfeld, increasingly distracted lives, increasingly frustrating markets, and the fact that institutions such as the American Heart Association have cleared TM as a tool for a healthy lifestyle— TM is having its moment on the Street.

Bringing meditation to the West

Any TM student will be shown videos of the Maharishi, a small man with long wispy hair, a scraggly beard, a high-pitched voice, and a penchant for giggling.

Born in India as Mahesh Prasad Varma in 1918, he renounced his name and familial ties in typical Hindu monk fashion after graduating from Allahabad University in 1942 with a physics degree and traveling to Jyotir Math in the Indian Himalayas to study under and serve Swami Brahmananda Saraswati, the man he reverentially called Guru Dev, which literally means "divine teacher."

Saraswati was the leader of the city's monastery. When the Maharishi — a title that means "seer" and is commonly used as shorthand — began his global tour of spreading TM in 1958, he made it clear that although he and his guru were Hindu monks and TM was rooted in the ancient Vedic scriptures, his practice was not tied to the Hindu faith.

Because of the caste he was born into, the Maharishi could not succeed Saraswati, but Saraswati entrusted him with the mission of spreading meditation around the world for the purpose of fostering peace.

The mission was not religious proselytizing, but rather making available a technique that anyone, whether they were Hindu, Christian, or atheist, could practice.

"I think where we are today is where Maharishi always wanted it to be — which is science-based, and evidence-based, and fits in with medicine and mainstream wellness programs," Roth told me.

He said the Maharishi, whom he knew from 1970 until the Maharishi's death in 2008, was as scientific as he was spiritual, and that he believed that the health benefits he felt from meditation could be proven. Researching the effects of TM was one of the reasons he founded a college, the Maharishi University of Management, in Fairfield, Iowa, in 1971.

Though I was skeptical of research coming from such a potentially biased source, the school has received tens of millions of dollars from the National Institutes of Health— a federal organization that does not liberally give out that level of funding. The school's findings have also been corroborated by other institutions, like Harvard Medical School and Stanford Medical School.

The wealth of peer-reviewed research on TM's ability to lower blood pressure and decrease the presence of stress-causing hormones at a rate significantly higher than other forms of stress relief has caused institutions such as the AHA to inspire doctors to tell their patients about it.

Meditating at the world's largest hedge fund

Dalio brought TM to his Bridgewater through the foundation's teachers, who still regularly visit.

Practitioners must learn TM from a certified teacher, who gives them one of many mantras, a meaningless "vibration sound," and assists them with perfecting the technique. Meditators sit still for 20 minutes and repeat this mantra in their head, letting thoughts float by and possibly "transcending," reaching a pleasant and invigorating state of "restful alertness."

The initial deal Dalio proposed around 2008 was that any employee with a tenure of six months or longer could take the $1,000 four-month course and, upon completion, Dalio would reimburse half the cost out of his own pocket.

After a few years, the course became popular, and many employees began regularly meditating twice a day. Dalio and his management team decided that it would be best to create a formal corporate reimbursement and training plan.

In the past eight years, around 500 employees have been trained. (Bridgewater's employee count ranged from roughly 735 to 1,700 employees in that time.)

Also in that time, Dalio has become easily the most vocal and influential proponent of TM in the finance community.

Though Bridgewater, which now has $150 billion in assets under management, became the world's largest hedge fund in 2005, it remained largely under the radar until 2011, when Dalio received mainstream press, including a full profile in The New Yorker. When the media asked him about his "secrets to success," he would laud TM.

As he's quoted as saying in the 2011 book "Transcendence," not coincidentally written by his son Paul's psychiatrist, Norman Rosenthal, TM is "the single biggest influence" in his life. It was Paul who convinced Rosenthal to revisit TM, which Rosenthal had learned years before, and to investigate it from a scientific standpoint.

Both Paul and his father are quoted in "Transcendence" and its 2016 follow-up, "Super Mind," and Rosenthal has supplemented his career as a practicing psychiatrist and Georgetown Medical School professor with speaking tours about the health benefits of TM.

This increase in literature about the health benefits of TM is one of the reasons the practice has exploded in popularity over the past few years, despite being taught in the US since the 1960s. It's connected especially during this time with Wall Street power players, many of whom now practice it daily.

TM on Wall Street

As Andrew Ross Sorkin, the founder of The New York Times Dealbook, told me over email, "Trading is a mental game, and anything that gives you even a slight edge is valuable."

Sorkin has been practicing TM "on and off" for the past three years. Brian Koppelman and David Levien, Sorkin's cocreators on the Showtime series "Billions" are regular meditators. The show is about a corrupt hedge funder's battles with a US attorney, and both characters have scenes where they try to collect themselves during TM sessions — a manifestation of the creators' shared habit as well as a nod to TM's recent rise in the financial world.

At the David Lynch Foundation, I took two group classes with Didier Phitoussi, who has been in the hedge fund industry for 23 years. I caught up with him recently, and he told me that he feels as though it has caught on in that world at this specific moment in time because "no one has been making any money."

Phitoussi told me that for investors, it's "being in front of a computer, looking for ways to make money and not finding anything. It's very frustrating." TM, he thinks, allows people in these situations to better deal with this stress and have a clearer head — similar to the way people would abuse a drug, he said, except meditation is healthy.

For Mark Axelowitz, managing director at UBS Wealth Management, the first step to become a meditator was reading Dalio's "Principles."

Axelowitz was reading up on Dalio before he called to ask him if he'd like to speak at his and Bill Ackman's annual fundraiser for the Boys & Girls Harbor foundation. Early in "Principles," Dalio writes about how he discovered meditation in college after seeing that the Beatles did it.

"It helped me think more clearly and creatively, so I'm sure that enhanced my enjoyment of, and success at, learning," Dalio wrote.

"The second I read that I decided I'm done — I'm meditating," Axelowitz said.

During his call with Dalio, Axelowitz asked him how he could begin meditating, and Dalio referred him to the David Lynch Foundation. Axelowitz began learning the next month, January 2012. Since then, he has practiced it every day, missing only one or two of the twice-daily sessions each week, if any. He now serves on the foundation's board.

When I asked him if he had any reservations about TM, he said he could see no downside at the time, since no one was forcing him to do or believe anything he didn't want to. And if it proved ineffective, he'd be giving himself some time to rest.

"I had at the time a Blackberry and an iPhone, and my life was nonstop work," Axelowitz said.

He said he's awake 18 hours a day, and that his time is split among his Wall Street job, philanthropy, his side job as an actor — he's had numerous bit parts in big productions since 2004— and his three kids.

"And I knew that if TM did not work, it gave me 40 minutes of downtime, with no interruption," he said.

But he found that it profoundly affected him. He said that since making TM a daily habit, he has been able to have a clearer mind, which has allowed him to be more present in both his professional and personal life. He also believes this regular training of his mind has allowed him to be more creative, which has allowed him to take on more significant and enjoyable acting gigs.

And to make everything more attractive, as it does for many Wall Streeters, he believed in the foundation's mission of teaching the technique to those who could benefit from it but can't afford its $960 price tag.

The foundation was created in 2005 to take a fee from those who could afford it and use that money to teach veterans with PTSD, students in underserved schools, and victims of abuse. The foundation told me that all funds go toward operations, and that "paying for others to learn" means subsidizing the work hours of a teacher on a pro bono lesson; I was told DLF teachers have salaries of roughly $40,000 to $80,000. Over the past 11 years, the foundation has taught more than 500,000 people for free.

Axelowitz became a trustee of the foundation and would invite some of his buddies on Wall Street to informational events. He said he's always happy to encourage others to look into learning TM from the foundation if they ask about it. He believes this network effect is one of the fundamental reasons the technique has spiked in popularity among finance types.

I spoke with two of the people to whom he's recommended it: Ken Gunsberger, a senior vice president at UBS Financial Services, and Barry Friedberg, CEO of the hedge fund FriedbergMilstein. Both Gunsberger and Friedberg have also donated to the foundation.

"When you're investing in the market, and the markets are moving around ... a lot of people get very emotional," Gunsberger said. "So it affects your day. If you have a stock or a fund that's not doing well temporarily, it bogs you down, it bothers you, so it affects your productivity. TM allows you to think through that, to see through that, and be less emotional."

Gunsberger has been practicing it daily for the past two years, after Axelowitz recommended it to him during a particularly rough period in his life. Gunsberger told me he noticed the effects of TM a month after practicing it. He was no longer feeling frantic or distracted.

Gunsberger added that, like both Dalio and Lynch have said, he will have TM sessions where a thought passes through his head that suddenly provides a solution he's been looking for.

The practice itself gets its name from the idea of "transcendence," a unique, blissful feeling of simultaneous detachment and awareness that arises when the mind is quiet. But these moments are not required of a TM meditation, and in between them the passing of ideas can start to feel less chaotic. That's what allows the mind to seemingly magically stumble upon the answer to a question it has been trying to solve.

Friedberg is also drawn to this invigorating sensory deprivation that is so elusive to Wall Streeters.

"I never leave a session where I don't feel energized," he told me. "I've almost never had a meditation session where I didn't get a good idea."

He's been practicing TM for the past two years, initially doing the full 40 minutes every day, but cutting down the 20-minute sessions to 15 minutes, and practicing now four or five days each week — yet still feeling "substantial benefits" to his mood and creative process.

He had tried mindfulness meditation and yoga throughout his life, and so he was open to trying TM when Axelowitz told him about it over lunch two years ago. He was further intrigued by the foundation's philanthropic mission, and decided the lesson fee was money well spent.

Dalio himself is far from a casual meditator using the technique as a way to take some quiet time — he seeks out moments of transcendence and has found them to have changed the way he interacts with life.

He told Rosenthal, in a passage from "Transcendence" now regularly cited in the TM community, that his decades of practicing TM have made him more "centered," in the sense of "being in a calm, clear-headed state so that when challenges come at you, you can deal with them like a ninja — in a calm, thoughtful way.

"When you're centered, your emotions are not hijacking you. You have the ability to think clearly, put things in their right place, and have good perspective."

The appeal of philanthropic self-help

Roth and Orsatti think TM has finally weathered the storm of misunderstanding or dismissal and is only going to get more popular.

Lynch agrees.

"In the past 11 years I have seen a complete transformation in the recognition by the scientific community of the benefits of TM for reducing stress, improving health, and promoting creativity and performance," he wrote to me in an email. "My goal for the foundation is to ensure that TM is available, at no cost, to every person who suffers from trauma and toxic stress — veterans with PTSD, abused women, and young people in underserved schools."

With the foundation as Wall Street's go-to meditation center, Lynch's mission is gaining traction as its wealthy business practitioners eagerly fund its pro bono work and scholarships for interested students who can't afford the full fee.

The scientific validation of TM, the increased popularity of meditation in general, and the ease of learning are all reasons its spreading. But it's also because of people like Ray Dalio.

"They see Ray's success — how are you going to argue with a guy who makes $5 million a day?" Gunsberger said. "You going to argue with that?"

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Around eight years ago, Bridgewater Associates founder Ray Dalio introduced Transcendental Meditation to his 735 employees.

Dalio had already established a unique, intense culture of "radical transparency" at Bridgewater that he likes to say is akin to being part of an "intellectual Navy SEALs," and he believed that Transcendental Meditation, or TM, would work as an effective counterbalance.

"I did it because it's the greatest gift I could give anyone — it brings about equanimity, creativity, and peace," Dalio told Business Insider in an email.

Since then, TM has popped into the mainstream, and Dalio has helped significantly. Over the last three years, the David Lynch Foundation TM center has taught almost 2,500 professionals — 1,150 in 2016 alone — and roughly 55% are from Wall Street.

The foundation was founded by the eponymous acclaimed director ("Twin Peaks,""Mulholland Drive") in 2005 to teach TM for free to underserved students, veterans with post-traumatic stress disorder, and victims of domestic abuse. Dalio has donated about $20 million to the DLF through the Dalio Foundation over the past decade, with funds specifically allocated to students in New York and San Francisco and veterans. The Dalio Foundation accounts for 20% of the DLF's funding.

Dalio began practicing TM in 1969 as a college student, after seeing that its founder, Maharishi Mahesh Yogi, taught it to the Beatles.

Dalio brought TM to his Bridgewater through the DLF's teachers, who still regularly visit.

Practitioners must learn TM from a certified teacher, who gives them one of many mantras, a meaningless "vibration sound," and assists them with perfecting the technique. Meditators sit still for 20 minutes and repeat this mantra in their head, letting thoughts float by and possibly "transcending," reaching a pleasant and invigorating state of "restful alertness." These teachers then regularly meet with the student to give personalized advice, because while the technique is easy in theory, it takes some practice.

The initial deal Dalio proposed to his company around 2008 was that any employee with a tenure of six months or longer could take a customized-for-Bridgewater course. The four-month program would cost $1,000 and, upon completion, Dalio would reimburse half the cost out of his own pocket.

After a few years, the course became popular, and many employees began regularly meditating twice a day. Dalio and his management team decided that it would be best to create a formal corporate reimbursement and training plan.

In the past eight years, around 500 employees have been trained. (Bridgewater's employee count ranged from roughly 735 to 1,700 employees in that time.)

Also in that time, Dalio has become easily the most vocal and influential proponent of TM in the finance community.

Though Bridgewater, which now has $150 billion in assets under management, became the world's largest hedge fund in 2005, it remained largely under the radar until 2011, when Dalio received mainstream press, including a full profile in The New Yorker. When the media asked him about his "secrets to success," he would laud TM.

As he's quoted as saying in the 2011 book "Transcendence," not coincidentally written by his son Paul's psychiatrist, Norman Rosenthal, TM is "the single biggest influence" in his life. It was Paul who convinced Rosenthal to revisit TM, which Rosenthal had learned years before, and to investigate it from a scientific standpoint. Rosenthal then went on to become possibly the highest profile doctor bringing to the public the wealth of peer-reviewed research on TM's proven ability to benefit people with high blood pressure and anxiety.

Dalio himself is far from a casual meditator using the technique as a way to take some quiet time — he seeks out moments of transcendence and has found them to have changed the way he interacts with life.

He told Rosenthal, in a passage from "Transcendence" now regularly cited in the TM community, that his decades of practicing TM have made him more "centered," in the sense of "being in a calm, clear-headed state so that when challenges come at you, you can deal with them like a ninja — in a calm, thoughtful way.

"When you're centered, your emotions are not hijacking you. You have the ability to think clearly, put things in their right place, and have good perspective."

SEE ALSO: Transcendental Meditation, which Bridgewater's Ray Dalio calls 'the single biggest influence' on his life, is taking over Wall Street

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