The world's largest hedge fund manager, Bridgewater Associates, apparently won't participate in the Treasury's much-ballyhooed public-private investment program designed to clear "legacy" securities and loans off of troubled banks' balance sheets. The $71 billion money-management firm reversed course Thursday, after earlier indicating it had planned to participate, according to a report in the New York Post. Bridgewater founder Ray Dalio blasted the program -- at least the securities side of the program -- as both a conflict of interest and one that offers very little leverage. In terms of a conflict of interests, Dalio zeroed in on Treasury's plan to hire five asset managers to run the program. "The managers are clearly in a conflict-of-interest position because they have both the government and the investors to please and because they will get their fees regardless of how these investments turn out," Dalio is quoted by the Post as writing in his letter. "We would not want to have our clients commit to invest, or even ask them to trust us being in this conflicted position." Investors had initially cheered the program when it was first announced, believing the government was offering the private sector access to cheap leverage that had largely evaporated during the ongoing credit crisis. Dalio, however, said that upon further inspection of the government's plan, actual leverage being offered is closer to 1-to-1, the Post reported. Dalio suggested the whole loan aspect of the PPIP would be more attractive to investors, possibly, offering leverage of as high as 12-to-1; but said Bridgewater had little interest in acquiring "illiquid loans." And, of course, investors specializing in whole loan acquisitions have had their own concerns, as well, as HousingWire reported previously on Mar. 24. See earlier story. It's unclear if other firms intend to follow Dalio and Bridgewater's lead, but the move is clearly an ominous one for a Treasury that is counting on private investors to make the most of remaining TARP funding. Write to Paul Jackson at paul.jackson@housingwire.com.