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10 things you didn’t know about Hugh Hendry, whose Eclectica hedge fund just closed

Hugh Hendry Eclectica closed

Hendry was born close to the Gorbals district of Glasgow

Hugh Hendry’s Eclectica hedge fund is no more. The outspoken Glaswegian has shuttered the 15 year-old fund after it slumped 9.4% in the year to August and lost 90% of its assets under management in the three years to February. For the moment, Hendry the hedge fund manager is out of action. In a letter to investors he said he’ll sit out of trading until the next downturn, but said he’s optimistic about the global economy.

Eclectica employed just seven registered people in the UK according to the FCA Register. All will now be out of jobs, along with Hendry himself. Here’s what you didn’t know about the UK’s most colourful ex-hedge fund manager.

1. He’s the son of a Glaswegian lorry driver

According to this article in the Independent, Hendry was the first in his family and one of the only people at his school to go to university. He grew up close to the Gorbals, a notorious housing estate in Glasgow.

2. He went to Strathclyde University and had planned to become an accountant

Hendry studied Accounting and Economics at Strathclyde. He had intended to go into accounting because, “your ticket to the middle classes was law or accountancy.”

However, in the fourth year of his four year course he realised that he had absolutely no desire to become an accountant and returned the sponsorship money he’d received from the accounting firm. The partner warned him that he would regret it as long as he lived. .

3. His first job was at Baillie Gifford, where he was labelled a troublemaker 

In 1990, Hendry claims to have been the first non-Oxbridge graduate to get a job at Edinburgh-based fund manager Baillie Gifford (known for its graduate training programme).

He stayed there for eight years and managed funds in the US and British teams. According to the Independent, he was ‘labelled a troublemaker.’

4. His second job was at Credit Suisse Asset Management, where he was too mouthy

In 1998, Hendry came to London to work for CSAM. He didn’t like it there, and (again according to the Independent), ‘spoke up’ and was fired within a month.

5. He had a fortuitous encounter with Crispen Odey who said he was a “pirate”

In an interview five years ago, Hendry says he was pretty unemployable in London after leaving Credit Suisse: “I was not a master of any one discipline. I spent a year doing this, a year doing this, whatever, and so I was a generalist. and no one wanted a generalist.”

Luckily, however, he met hedge fund manager Crispen Odey. Odey invited Hendry to dinner and reportedly told him: “I think you are like us. You are one of the pirates, and I’d like you to join my ship.”

After this ‘fortuitous encounter,’ Hendry moved to Odey Asset Management in 1999, aged 29. At this point, Odey only employed a dozen people and had $500-600m in assets under management.

6. He is able to shut up when necessary

Despite being highly opinionated and extremely prone to expressing his opinions, Hendry seems to have feigned placidity when he was first at Odey.

When he first joined, he told The Hedge Fund Journal that he spent 12 months ‘paying his dues’, ‘keeping quiet’ and ‘soaking up what was going on.’

This appears to have been partly due to the awesome presence of his mentor.

“When I joined Crispin my confidence plunged. It’s bad luck to communicate with genius,” he told Investor’s Chronicle.

7. He has been highly successful 

Despite this, Mr. Hendry managed the top performing CF Odey Continental Europe Fund and was made a partner at Odey in 2002. In 2002 he also took the Odey Eclectica Fund out of equities and put it into cash and bonds, a notorious move which generated annual returns of 49%.  In 2008, he achieved a 31% return by betting against U.S. and European banks during the financial crisis.

8. He is highly opinionated

Shortly after this, Hendry appears to have fallen out with Crispin Odey.

Hendry says their relationship moved into a ‘second phase’ characterised by the realisation that Odey wasn’t infallible and characterised by the notion that, “That is an interesting view you’re giving me, here’s what I think.” In 2005, he spun out the Eclectica Fund with with Simon Batten, a fellow partner at Odey.

Hendry’s outspoken approach also landed him in trouble in 2010, when he appeared on Newsnight and told Nobel laureate economist, Joseph Stiglitz: “Um, hello? Can I tell you about the real world?” during a debate about the economy.

9. He thinks hedge fund managers are the ‘guard dogs of the capitalist system’

He also thinks they are the political opposition.

10. He also thinks hedge funds are like bananas

In 2012, Hendry wrote an opinion piece in the Financial Times where he said the hedge fund industry was like “the plight of the banana”. “Today the world eats predominately just one type of banana, the Cavendish, but it is being wiped out by a blight known as Tropical Race 4, which encourages the plant to kill itself.”


Have a story or comment you’d like to share? Contact: sbutcher@efinancialcareers.com

Photo credit: Gorbals, Glasgow, Scotland Feb 2007 by 44b is licensed under CC BY 2.0.

Comments (11)

Comments
  1. he is a god – we bow at your feet Oh Mighty Hugh !

    he also talks a big book as they say.

  2. A breath of fresh air, he says what others are thinking

  3. He’s the Scottish Dr Doom.

    He made a bad call on soft commodities a couple of years ago (which he admitted on CNBC.)

    His abrasive attitude is always entertaining.

  4. I thoroughly enjoy reading his newsletters. They’re often entertaining and informative. Like many other discretionary macro guys, he performs a great deal of research, which understandably manifests itself as a high conviction view of the world. Itinerant preachers will always stand out from the crowd and sometimes be crucified for their proclamations. Hugh appears to be no different. I understand how some would interpret his occasional TV appearances as vain attention-seeking (I love myself too). I see it as intellectual confidence, supported by substantial hard research. The fact that Newsnight requests his presence is possibly because he is very eloquent and articulate. He can express ideas to a broad audience in a digestible, intuitive fashion. Someone like Peter Thiel would leave them cross-eyed.

    More power to him and an extra pat on the back for hiring a “diverse” range of employees.

    Alexander

  5. i would add, typical coat-tailer, he was hardly setting the world alight prior to meeting Odey.

  6. To add he is also featured in the new Drobny book “invisible hands” although the interview with the “plasticine macro trader” is anonymous, it is clearly Hendry, the POT call on CNBC gives it away a bit.

    Probablly the best (or at least a close second best) interview in the book.

    Open, informative and provocative. His latest commentary from the Electica fund is also a great read.

  7. I thought he slightly misjudged the Newsnight gig – I’m sure in his day job he’s a talented contrarian but he just came across as stroppy and perverse…

  8. Although I don’t always agree I’m always impressed by Hendry, firm grasp of history and unlike most funds he does actually hedge. Few losses, lots of huges gains and good risk management.

  9. @Davros – are you sure about the “few losses” statement ? How deep were the losses ? what was the peak to trough drawdown ? Or are you just another Hendry groupie ?

  10. the Gordon Ramsey of the square mile-wonderful ass-kicking job on
    Newsnight-I thought for a brief second that the Geyser was golng to hit
    Hugh with his Handbag!
    10 yr note returns to 3.00%-I don’t see any further Gold highs for the next
    6 mths-deflation bearish for Gold plus everyone is touting it.
    Is it not the same Hugh Hendry who played for Strathclyde Reserves
    when they were in the 2nd Division????

  11. I find him very attractive and love what he says

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