Not everyone had a treacherous time investing in 2018.

One of Bridgewater’s hedge funds delivered returns of nearly 15% last year, reported The Financial Times, despite nearly every major asset class ending 2018 in the red.

“Pure Alpha,” the flagship vehicle of Ray Dalio’s Bridgewater, the largest hedge fund in the world with $160 billion in assets under management, gained 14.6%, net of fees in 2018, according to people familiar with the matter.

That performance was made all the more impressive by the general state of global equities toward the end of the year — and the impact this had on Pure Alpha’s peers. A challenging investing environment saw the average hedge fund lose 2% in the year to November, according to data from HFR. Meanwhile, macro funds such as Bridgewater, which seek to profit from big moves in currency, bond and commodity markets, fared even worse, dropping by more than 4%.

Bridgewater’s triumph has helped it to put years of disappointment behind it. Pure Alpha and its other hedge funds have struggled since the financial crisis, making 2018 its best performance in five years.

Forward-thinking

Key to Pure Alpha’s successful turnaround was its conviction that the global economy was weakening. Bridgewater executives had been warning for some time that the pace of interest rate hikes and the strength of the economy could cause the stock market to decline.

In an interview with The Financial Times in October, the firm’s co-chief investment officer Bob Prince predicted that the economy was as at an “infection point.”

“We are clearly shifting from an era of monetary easing to monetary tightening,” said Prince during the interview. “A lot of optimism about future earnings growth has been baked into equity valuations. But we are at a potential inflection point where the economy is moving from hot to mediocre.”

Bridgewater trades across 150 different markets. Its Pure Alpha fund has been around since 2001. During that period it has generated an average annual net return of about 12% per year, according to CNBC. The fund did particularly well during the market downturns between 2000 to 2003.