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Bridgewater Bancshares

#6575

Rank

$298.38M

MarketCap US

US United States

Country

Summary
Bridgewater Bancshares, Inc. operates as the bank holding company for Bridgewater Bank that provides banking products and services to commercial real estate investors, small business entrepreneurs, and high net worth individuals in the United States. The company offers savings and money market accounts, demand deposits, time and brokered deposits, and interest and noninterest bearing transaction, as well as certificates of deposit. It also provides commercial loans to sole proprietorships, partnerships, corporations, and other business enterprises to finance accounts receivable or inventory, capital assets, or other business-related purposes; paycheck protection program loans; construction and land development loans; 1-4 family mortgage loans; multifamily lending products; owner and non-owner occupied commercial real estate loans; and consumer and other loans. In addition, the company online, mobile, and direct banking services. It operates through seven full-service offices located in Bloomington, Greenwood, Minneapolis, St. Louis Park, Orono, and St. Paul, Minnesota. The company was incorporated in 2005 and is headquartered in Saint Louis Park, Minnesota.

History

The firm's history includes the pioneering of industry strategies such as: currency overlay, the separation of alpha and beta strategies, the creation of absolute return products, and risk parity. According to Financial News, the company was the fastest growing asset manager from 2000 until 2005 when it stopped accepting new accounts. Its assets under management have increased by 25% each year during the 2001-2010 decade with employees at eleven times their year 2000 levels. The company's Daily Observations research is reportedly read by leaders of central banks and managers of pension funds around the world.

1975-1990: Consulting, research, money management

Bridgewater Associates was founded by Ray Dalio in 1975 from an office in his Manhattan apartment. At that time, the business consisted exclusively of advising corporate clients and the management of domestic and international currency and interest rate risks. The firm later changed its emphasis and began selling economic advice to governments and corporations such as Nabisco and McDonald's.The company began publishing a paid subscription research report called the Daily Observations which inspired McDonald's Corp. and its main supplier to become clients in the early 1980s. Another client was Banks of Mid-America and its treasury department director, Bob Prince, later joined Bridgewater Associates as co-CIO. In 1981, the company moved its offices from New York City to Connecticut.

The company's first account was funded by a US$5 million fixed-income investment through Hilda Ochoa-Brillembourg of World Bank in 1987. In the mid-1980s, the firm changed its business focus from currency and interest rate management to global bonds and currencies for institutional investors. As a fixed income and currency adviser to institutional clients, the company gained a reputation as a currency trader and a developer of techniques for overlaying currencies. In 1990, it launched a hedge fund portfolio using monies from Kodak and Loews Corporation and began formally offering its currency overlay products to its clients.

1991-present: Pure Alpha, All Weather, Pure Alpha Major Markets

Bridgewater Associates developed several "innovative investment strategies" during the 1990s such as inflation-indexed bonds, currency overlay, emerging market debt, global bonds and "super-long duration bonds". The firm also "pioneered the separation of alpha and beta" investments and developed a strategy called "alpha overlay" which involved a portfolio of "20 uncorrelated" investments, leveraged for risk or return and combined with cash or an investment market benchmark.The firm launched its Pure Alpha fund and began to market portable alpha investment strategies in 1991. The Pure Alpha fund did well during the market's downturn of 2000 to 2003 and, as hedge funds became more popular, the company expanded its assets through its connections with various underfunded pension funds, some of which were already clients. In 1992 the firm introduced its global bond overlay program. In 1995, company executives participated in the discussions at the U.S. Treasury and advised federal government on the development of inflation-indexed bonds.Bridgewater launched its All Weather hedge fund and pioneered the risk parity approach to portfolio management in 1996. The firm's assets under management grew from US$5 billion in the mid-1990s to US$38 billion by the year 2003. In June 2000, the firm was ranked as the best performing global bond manager for that year and the prior five years by Pensions & Investments magazine. In 2002, the company was ranked by Nelson Information as the World's Best Money Manager in recognition of the 16.3% return on its International Fixed Income program. The firm received the Global Investor Awards for Excellence-Global Bonds award in 2003. The following year the company received the Global Pensions Currency Overlay Manager of the Year award, and 2 "best in class" awards from the PlanSponsor Operations Survey.In 2006, the company's flagship Pure Alpha fund began "returning money" to its clients in order to maintain its investment strategy and enforce its "capacity limit." The firm began moving all of its clients into alternative strategies , thereby eliminating the traditional investment approach from its portfolios. That year it was honored by PlanSponsor Magazine with the Lifetime Achievement Award and the Global Pensions magazine Currency Manager of the Year award and the Money Management Letters, Public Pension Fund Award for Excellence and the Alternatives Manager of the Year award.By 2007, the firm's total assets under management grew to US$50 billion . According to a 2007 article in Barron's magazine, "nobody was better prepared for the global market crash" than its clients and subscribers to its Daily Observations. The company "began sounding alarms..in the spring of 2007 about the dangers of excessive financial leverage." The company's researchers reviewed the public accounts of most of the major financial institutions around the globe and found that estimated future losses due to bad debts totaled US$839 billion. In December, these conclusions were reported to the U.S. Treasury Department when company founder Ray Dalio met with U.S. Treasury Secretary staff and other White House economic advisers. Bridgewater's Pure Alpha fund "spared its investors" from most of the stock market's "meltdown" in 2008. However, this strategy was not successful in 2009 when economic growth responded faster than anticipated and the Dow Jones Industrial Average increased by 19% while the company's Pure Alpha fund reportedly gained a mere 2% to 4%. Bridgewater's Pure Alpha II has posted a historic average return of 10.4 percent with only 3 losing years. Senator John McCain visited the firm and addressed company employees during his 2008 presidential campaign. The Teacher Retirement System of Texas invested in $250 million in a stake in Bridgewater Associates Intermediate Holdings, LP.Ray Dalio, the company's founder, began using the term "d-process" in February 2009 to describe the deleveraging and deflationary process of the subprime mortgage industry as distinct from a recession. That year, the company was termed the largest hedge fund in the U.S. and it received the Alternative Investment News 7th Annual Hedge Fund Industry's Lifetime Achievement award and PlanSponsor's Hedge Fund Manager of the year award. When the U.S. gross domestic product faltered in 2010, the firm had significant gains on their investments in Treasury bonds and other securities, and in November founded the US$10 billion, Pure Alpha Major Markets fund which brought the company's total assets under management to more than US$100 billion. In 2011 the firm received several honors. It was ranked number one on Institutional Investor's "world's top 100 hedge funds" list. It received the Macro-Focused Hedge Fund Firm of the Year award and the aiCIO Hedge Fund Industry Innovation Award. Absolute Return + Alpha ranked the company number one in its Hedge Fund Report Card and Billion Dollar Club categories.At the end of May 2016, Connecticut is expected to approve a plan which will give Bridgewater Associates $22 million in grants and loans in exchange for job training, job creation, and building renovations. The company also must agree to retain 1,402 jobs they already support in Connecticut. The company could also become eligible for as much as $30 million in urban tax credits.Between 2014 and 2016, the Regents of the University of California withdrew $550 million from Bridgewater Associates also due to concerns about Bridgewater's future leadership. In June 2018, it was announced to clients and employees that Bridgewater would change its corporate structure and become a partnership. By June 2018, the Teacher Retirement System of Texas, the Ontario Municipal Employees Retirement System, the Singapore's sovereign wealth fund and the International Monetary Fund had invested in Bridgewater Associates.In September 2017, Bridgewater announced plans to launch an investment fund in China with Chinese government's approval.In 2020, Bridgewater reported hefty losses due to COVID-19 related market volatility, with the flagship pure Alpha II fund losing 18.6% as of August 2020.


Mission
Our mission is to provide exceptional customer service and financial solutions that meet the needs of each customer, foster the success of the communities we serve, and create value for our shareholders.

Vision
Our vision is to be the premier community bank in all of our markets by exceeding customer expectations and continually investing in our people and communities.

Key Team

Mr. Joseph M. Chybowski (Chief Financial Officer)

Mr. Mark E. Hokanson (Chief Technology Officer)

Mr. Ben M. Klocke (Gen. Counsel)

Mr. Daniel D. Poppe (Sr. VP & Sr. Loan Officer)

Ms. Lisa M. Salazar (Chief Deposit Officer)

Mr. Tony Ferraro (Managing Director of Commercial Lending)

Mr. Erik Schwegler (Sr. VP of Commercial Real Estate)


Recognition and Awards
Bridgewater Bank has been recognized nationally for its community service, including being named one of the Best Banks to Work For by American Banker in 2017 and one of the Top 100 Companies to Work For in Minnesota by Minnesota Business Magazine in 2016.

References
Bridgewater Bancshares
Leadership team

Mr. Gerald John Baack (Founder, Non Independent Exec. Chairman, CEO & Pres)

Mr. Jeffrey D. Shellberg (Co-Founder, Exec. VP, Chief Credit Officer, Sec. & Non Independent Exec. Director)

Ms. Mary Jayne Crocker (Exec. VP & COO)

Products/ Services
Banking, Finance, Financial Services, Real Estate
Number of Employees
100 - 500
Headquarters
Bloomington, Minnesota, United States
Established
2005
Company Registration
SEC CIK number: 0001341317
Net Income
20M - 100M
Revenue
100M - 500M
Traded as
BWB
Social Media
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