Bridgewater Associates has raised the equivalent of $1.25bn for its third investment fund in China, according to a person familiar with the matter, catapulting the hedge-fund firm into the ranks of the biggest foreign managers of private funds in the world’s second-largest economy.

Founded by longtime China bull Ray Dalio, Bridgewater began rolling out private funds in the country in 2018 after a wholly-owned unit of the American asset manager was awarded a license to raise money from high-net-worth individuals and institutional investors in China and invest it in domestic yuan-denominated securities.