Hugh Hendry

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Hugh Hendry is the founding partner and, at various times, the chief investment officer, chief executive officer and chief portfolio manager of Eclectica Asset Management. He began to attract attention when his fund achieved a 31.2 per cent positive return in 2008 in the depths of the financial crisis, earning him a reputation as a contrarian investor,[1] but his claim on wider public notice was based in a series of outspoken media appearances. Hendry has been referred to as "the most high-profile Scot" in the hedge fund sector.[2]

Hendry once said to an interviewer: "To my mind, the three most important principles when it comes to investing are Albert Camus's principles of ethics: God is dead, life is absurd and there are no rules." He suggested that a great fund manager was defined by "an ability to establish a contentious premise outside the existing belief system, and have it go on and be adopted by the rest of the financial community".[3]

Background and career[edit]

Hendry was born in Glasgow, Scotland, in 1969 and graduated from Strathclyde University in 1990 with a BA in economics and finance. His father worked as a lorry driver and he was the first member of his family to go to university.[4]

In 1991 Hendry joined the prestigious Edinburgh investment management firm, Baillie Gifford. He claimed that he was hired only because investors had instructed the company to recruit more working-class employees.[2]

After Baillie Gifford he worked for Credit Suisse Asset Management. Following a chance meeting with Crispin Odey, Hendry joined Odey Asset Management in 1999. "It was a meeting of minds," Hendry said. "He checked my references, got the message that I was a troublemaker, and said, 'You're one of us, you're one of the pirates'."[5]

He learned the art of "momentum investing"[1][6] and was responsible for managing a range of funds from the Eclectica Fund to more than a $1 billion of long only European mandates, including the award-winning Odey Continental European Fund.[7] "(Odey) taught me how to manage money," Hendry said. "More than that, he taught me how to misbehave. Misbehaviour is all about curiosity, how you invoke and think about change, which is very necessary in the management of money."[8]

Eclectica Asset Management[edit]

Eclectica Asset Management was founded in 2005[9] when Hendry and his colleague Simon Batten purchased the management contract of the Eclectica Fund from Odey to establish themselves as a stand-alone fund manager.[5] "A lot of people define investors as value or growth. We are neither. We are time investors," Hendry said.[6]

Despite his reputation as a contrarian, Hendry explained to the Financial Times in July 2012 that his approach continued to be based in taking advantage of market momentum. "Our ideas are harshly disciplined by market trends. You will never see us pursue a homegrown idea when it is to the detriment of the prevailing trend," he said.[10]

Media appearances[edit]

Hendry has become known in the United Kingdom for his outspoken commentary on the financial crisis. On an episode of the BBC's Newsnight programme aired on 9 April 2010, Hendry began his response to comments by the Nobel-prize winning economist Joseph Stiglitz on the financial position of Greece by saying, "Erm, hello. Can I tell you about the real world?"[4][11] On the same programme in May 2010, Hendry responded to a question from host Jeremy Paxman about the current European economic situation and the possibility of a Greek sovereign debt default with the comment, "I would recommend you panic".[12][13] An outspoken appearance on the BBC's Question Time followed in October 2010.[14]

At the LSE's Alternative Investments Conference in 2011, during a discussion with Steven Drobny, Hendry joked that his clients have banned him from further media appearances.[15] Hendry is the anonymous 'Plasticine Man' in Drobny's book on hedge fund managers 'Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money'.[16]

References[edit]

  1. ^ a b "Hugh Hendry Bio", Valueslots. Retrieved 2012-06-08.
  2. ^ a b Sharp, Tim. "Scottish hedge fund king: I’m heading offshore to avoid Brussels", The Herald, 20 December 2009. Retrieved 2012-06-08.
  3. ^ Norton, Leslie P. "Barron's Interview: Keeping an Eye on Wealth Creation", Barron's, 20 December 2009. Retrieved 2012-07-19.
  4. ^ a b Werdigier, Julia. "An Outspoken Man in a Secretive Trade", The New York Times, 19 July 2010. Retrieved 2012-06-08.
  5. ^ a b Usborne, Simon. "Master of the universe: Can Hugh Hendry teach us to love hedge funds?", The Independent, 28 May 2010. Retrieved 2012-06-08.
  6. ^ a b Fieldhouse, Stuart."Focus In the Eye of the Storm: Choppy waters are meat and drink for Eclectica's Hugh Hendry", The Hedge Fund Journal, May 2008. Retrieved 2012-06-08.
  7. ^ "Eclectica Asset Management: People", Eclectica Asset Management website. Retrieved 2012-06-08.
  8. ^ Blackhurst, Chris. "The MT Interview: Crispin Odey of Odey Asset Management", Management Today, 1 April 2011. Retrieved 2012-06-13.
  9. ^ "Eclectica Asset Management: Home", Eclectica Asset Management website. Retrieved 2012-06-08.
  10. ^ Cookson, Robert. "Hendry – ‘Bad things are going to happen’", Financial Times, 17 July 2012. Retrieved 2012-07-19.
  11. ^ "Euro currency crumbling?, discussion on BBC Newsnight", Newsnight, 9 April 2010. Retrieved 2012-06-08.
  12. ^ "I Would Recommend You Stop Going Skiing And Panic", Business Insider, 27 May 2010. Retrieved 2012-06-08.
  13. ^ "Greece, discussion on BBC Newsnight", Newsnight, 27 May 2010. Retrieved 2012-06-08.
  14. ^ Kaso, Hysni. "Hendry on Question Time: The economy, MI6 and 'bogeyman' bankers", Investment Week, 29 October 2010. Retrieved 2012-07-19.
  15. ^ "LSE AIC 2011 Invisible Hands Unveiled: A Keynote Dialogue Between the Plasticine Macro Trader and Author", London School of Economics conference recording on Vimeo, September 2011. Retrieved 2012-06-08.
  16. ^ Polycapitalist, The. "Hugh Hendry Explains His "Self Loathing" And The "Voices Inside His Head", Business Insider, 31 January 2011. Retrieved 2012-06-08.

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