(Bloomberg) -- David McCormick is betting that a successful career in finance and service in the military can overcome his past employer’s coziness with China and less-than-enthusiastic remarks he has made about Donald Trump.
The former chief executive officer of Bridgewater Associates, the world’s biggest hedge fund, announced Thursday that he’s running for a U.S. Senate seat in Pennsylvania as a Republican. McCormick made sure to highlight aspects of his personal narrative that worked for Trump in the 2016 presidential race: that his wealth is self-made and he’s not beholden to special interests.
McCormick, 56, is already airing ads that promote his work as a youngster on his family’s Christmas tree farm and his military career -- he’s a West Point graduate and Gulf War veteran -- a background that may appeal to blue-collar and rural Republicans.
At least among financiers, his candidacy is off to an auspicious start, with Blackstone Inc. co-founder Steve Schwarzman, Trump’s biggest Wall Street donor in 2020, offering his support, according to people familiar with the matter. McCormick also has the advantage of being able to tap his Bridgewater riches to finance his campaign, something he fully plans to do, another person said.
Long-time Carlyle Group Inc. executive Glenn Youngkin’s victory in November’s race for Virginia governor has stirred optimism among bankers and dealmakers that the antipathy directed toward Wall Street after the 2008 financial crisis has sufficiently receded.
But McCormick’s time at Bridgewater also provides ammunition to his opponents in the GOP primary, including celebrity physician Mehmet Oz. Near the top of the list is the firm’s close ties with China, a nation that Trump blamed for the pandemic and many of the U.S.’s economic woes. And while winning in business can provide an edge in politics, McCormick’s time at a $150 billion hedge fund with an unusual culture will elicit intense scrutiny.
Here’s a look at some of the top issues that McCormick will have to navigate on the campaign trail:
Trashing China was a linchpin of Trump’s political ascent, and other Republicans have embraced the tactic. That’s especially true when it comes to Wall Street, with some GOP senators demanding that asset managers sell their Chinese stocks and that regulators oust China-based companies from U.S. markets.
The rigid stance poses problems for McCormick because Bridgewater founder Ray Dalio rarely skips an opportunity to praise the Communist regime. Bridgewater manages about $5 billion combined for the China Investment Corp., a sovereign wealth fund, and the State Administration of Foreign Exchange, which handles foreign-currency reserves.
The connections go even deeper than business. Dalio sent his son to live and attend school in Beijing for a year in the 1990s, and the hedge fund founder’s family foundation also has donated more than $100 million to Chinese charities.
In November, Dalio created a stir -- and a U.S. political backlash -- when he compared China to a “strict parent,” when asked during a CNBC interview about situations where the Communist Party has made citizens disappear. He praised President Xi Jinping this week for seeking to redistribute wealth and opportunities more equally among the country’s population.
Read more: Dalio Says U.S. Needs a Dose of China’s Common Prosperity
McCormick has made clear that his views on China differ dramatically from Dalio’s and that the two have often argued about it over the years.
But that defense hasn’t insulated McCormick from attacks. A super PAC backing Oz has released a video criticizing Bridgewater’s Chinese investments, portraying McCormick as a ruthless CEO and friend of the country. “David McCormick: Wall Street and China win, Pennsylvania loses,” the narrator said.
All candidates in the Republican primary are expected to aggressively vie for the ex-president’s endorsement, as it would be almost impossible to win if Trump backs someone else.
McCormick’s previous public comments about Trump may work against him. For example, he spoke favorably of President Joe Biden at a Bloomberg event last year, while blaming Trump for the political “polarization” in the U.S. and “the divisiveness that has characterized the last four years.” Trump, McCormick said, has “a lot of responsibility for that.”
McCormick also supported Trump opponent Jeb Bush in the 2016 Republican presidential primary.
On the plus side, McCormick does have strong connections to Trump’s inner circle. His wife, Goldman Sachs Group Inc. partner Dina Powell McCormick, served on the White House staff early in the 45th president’s administration. She’s also close with Ivanka Trump and her husband, Jared Kushner. And McCormick has hired several of Trump’s most-favored staff, including Hope Hicks and Stephen Miller, as campaign advisers.
Bridgewater employees are required to openly critique one another in front of colleagues, with Dalio believing that such interactions ensure the company operates as a meritocracy. Taking that mantra to the extreme, the firm tapes and archives all meetings for future study and discussion. Dalio has said that his business principles aren’t for everyone but that those who don’t like them are free to leave -- and often do.
The hedge fund also was the target of a high-profile lawsuit filed by former co-CEO Eileen Murray, who alleged that the firm threatened to withhold her deferred compensation because she went public with gender-discrimination allegations. While Murray settled with Bridgewater in 2020 on terms that she called “amicable and fair,” the conflict raised questions about its treatment of women. The firm’s leaders said it prides itself on promoting diversity and an inclusive workplace.
While McCormick grew up in Bloombsburg, Pennsylvania, and briefly ran a company in Pittsburgh, he has spent most of his life outside of the Keystone State. He lived in Washington while working in George W. Bush’s administration and has been at Westport, Connecticut-based Bridgewater since 2009.
©2022 Bloomberg L.P.
BNN Bloomberg Picks
Canadian soccer is hotter than ever. Too bad we can’t cash in
Wealthsimple founder says Canada should 'plant a flag' in crypto
Employers must create a culture that’s sensitive to mental health: CAMH
'Ontario is closed for business:' Concert, theatre organizers face new COVID hurdles
Anxious about math? It could be impacting your finances
Ski resorts aim for more efficient snowmaking amid drought