Dalio’s Shakespearean Turn Is a Sign of the Times

Playing Shakespeare’s King Lear is the crowning ambition for some actors, but in 2023 we’re seeing superstar hedge fund managers Daniel Och and Ray Dalio trying out for the role in real life.

In the original version of the story, mixing myth with perhaps some nuggets of historical truth, a pre-Roman Leir of Britain retires and turns his kingdom over to his two daughters and sons-in-law, who betray and neglect him. He goes to France to enlist the help of his third daughter, who provides him with an army to retake his kingdom, where he rules for three more years before dying peacefully.

In Shakespeare’s version (spoiler alert), the French invasion fails and everybody dies. We’ll have to wait and see whether Och and Dalio relive the traditional or Shakespearean versions of the tale.

When Och stepped down in 2018 from the Och-Ziff hedge fund (now Sculptor Capital Management Inc.) he co-founded and ran, he did not turn it over to two of his three children, but to Robert Shafir. He has been unhappy with its performance since and incensed at a plan to sell the operation. Instead of a French army, he is backing other superstar hedge fund managers including Boaz Weinstein in their bid to take over the firm.

Ray Dalio has sons, not daughters. When he gave up control of Bridgewater in 2022, like Och he left management of the hedge fund to senior executives rather than relatives. He too has been unhappy with its performance and wants back in.

The struggle of aging patriarchs to reclaim power ceded to younger rivals is older than recorded history. It doesn’t play out much in modern business because most large entities are run by boards and executive committees where power is ceded gradually and usually among like-minded executives. That doesn’t eliminate struggles, but it makes them more discrete, if not less nasty.