Jim Grant, editor of the Grant's Interest Rate Observer, regrets portions of his blistering report on Oct. 6 that raised questions about Ray Dalio's Bridgewater Associates and its relationship with KPMG.
"We were wrong to question the relationship between the auditor and Bridgewater," Grant said on CNBC's "Closing Bell" Friday. "Bridgewater is a secretive and eccentric firm and I let my suspicions of that get in the way of our ordinarily comprehensive due diligence."
Grant said he is not fully retracting the story, but admitted he was incorrect to implicate the hedge fund's relationship with KPMG, lack of prime brokerage relationships and expressing any nefarious connotation over former Bridgewater employees leaving to work at its custodian Bank of New York Mellon.
"Our failure to get the facts ... It pains me greatly," he added. "I ought to know better."
He said Bridgewater did not threaten any lawsuits over the report, but "they were furious."
But Grant did maintain that he was not retracting his view that Bridgewater has grown too big to maintain its previous level of strong performance.
"I do think Bridgewater will be a figure head of the next crisis," he told CNBC Friday.
The investment newsletter issue published last week by the well-respected Grant became the talk of Wall Street.
"Grant's is bearish on the world's biggest and most client-enriching hedge-fund organization. As Bridgewater is closely held, this must be a conceptual short-sale. It's no less important for that reason, we think," the publication run by Grant said.
"Nobody knows when today's credit-enhanced, central-bank-infused, interest-rate-inflated updraft in asset prices will run its course, still less the name of the firm with which history will associate that inflection point. For the latter distinction, Grant's is penciling in the name of the firm that Dalio built."
The report noted how Dalio is preoccupied lately doing a TED talk, conducting multiple media interviews promoting his new book and feuding with journalists.
"Such activities have one thing in common: They are not investing," the note said.
At the end, the Grant publication said it doesn't not believe there is a long term future for the firm.
"Many are the mysteries and contradictions of the world's largest hedge fund. We will go out on a limb: Bridgewater is not for the ages," the report concluded.
Bridgewater is the world's largest hedge fund, managing about $160 billion, according to its website.
The firm is known for its Pure Alpha investing product, which became the most successful fund ever in the industry. The fund combined multiple uncorrelated return strategies that are leveraged to maximize returns, while lowering risk.
Bridgewater sent this statement when asked for comment on the Grant's report:
"The recent story appearing in Grant's is inaccurate and misinformed. This reporting is devoid of proper fact checking, lacks a basic understanding of the rules, regulations and processes of the securities industry, and is demonstrably false."