Employees at the world’s largest hedge fund, Bridgewater Associates, are apparently on a path to vote between Ray Dalio, 66, the firm’s founder and spiritual leader, and Greg Jensen, 42, co-CEO who oversees Bridgewater’s research and trading and is the heir apparent to the noncorrelated investing throne. At issue appears to be a violation of a founding principle laid down by Dalio. In a statement sent to ValueWalk late Friday afternoon, both Dalio and Jensen disputed the characterizations made in the original Wall Street Journal report and said this radical process is what drives success.

Core Bridgewater principle violated as heir apparent talk’s behind founder’s back and is caught on tape

Bridgewater employees will soon decide if Jensen has “integrity” to lead the firm while Dalio will be assessed on his 2011 promise of a succession plan, according to a report in The Wall Street Journal by Rob Copeland and Bradley Hope.

“The question here about Greg is whether he said things about me on tape in our meetings that he did not discuss with me before,” Dalio told The Wall Street Journal earlier today. The company is guided by a set of 210 principles, many of which center on the concept of only saying something to a person’s face that you say behind their back. Jensen characterized the dispute as “healthy” and following the Bridgewater system has “resulted in the incredible working relationships that have made Bridgewater so successful.”

In a statement sent to ValueWalk, Dailio called the article a “sensationalist mis-characterization” and said this was just an example of what makes the world’s most successful hedge fund unique:

The article is a sensationalist mis-characterization of what is going on. Greg and I have had lots of disputes over the last 20 years, and what’s great is that we have a systematic process for working ourselves through them. This particular dispute has already been resolved via our process and Greg and I both expect to work together, probably for the rest of our careers. More importantly, we have a fabulous community of people who wouldn’t work anywhere else because they treasure having the radical transparency into such things, so that they know that there’s no spin and no closed door, back-biting politics. I recognize that it’s difficult for people who aren’t in our culture to understand it, and I understand that distorted gossiping about it is going to occur. It’s regrettable that the Wall Street Journal isn’t above that. I encourage people who are interested in understanding our culture to go to Principles.org so that they can read our principles directly.

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