With a worldwide reputation as a contrarian, Hugh Hendry is the founder of Eclectica Asset Management, and he’s not shy about sharing his views on the world of investing. He is a macro fund manager who places bets on global trends and monetary policies. His firm Eclectica burst onto the scene in 2008 when it brought in huge returns while nearly everyone else was taking big losses. Though Eclectica has not lived up to its auspicious start in the years since, Hendry continues to attract attention with his high-profile quips, interviews, and outspoken viewpoints.
A native of Glasgow, Scotland, Hugh Hendry got his BA in economics and finance in 1990 at local Strathclyde University, one of the oldest universities in Scotland. He was the first in his family to do so – and he’s made the most of it.
A year after graduation, Hendry got a job at Baillie Gifford, one of Edinburgh’s most renowned investment management firms and then moved on to work at Credit Suisse Asset Management.
His break came when he joined Odey Asset Management after a meeting with its founder, Crispin Odey, who started his firm with over $100 million in seed money from none other than George Soros. Odey immediately took a fancy to the younger Hendry because he saw something of a pirate or renegade in Hendry’s persona, to which he attributed part of Hendry’s burgeoning success and wide-open future.
It was at Odey Management that Hendry learned to become a momentum investor. Though he relishes being something of a pirate, Hendry believes that being an investor motivated by trends describes him more accurately than does the contrarian label because that’s what he tries to do – take advantage of momentum in the market.
Life at Odey also helped Hendry learn how to manage money and question everything. He realized that, since change is inevitable, embracing and even obsessing over is a key to being able to successfully manage money.
Eclectica Asset Management Makes a Splash
In 2005, Hugh Hendry bought out the contract of Odey’s Eclectica Fund, which had been established in 2002, to start his own hedge fund firm Eclectica Asset Management.
Eclectica is a global macroeconomics investing firm that responds to changes in the global market quickly, effectively, and systematically. Under Hendry’s guidance, it still keeps a dynamic outlook when it comes to risk, which is part of what Hendry believes is the best way to protect and grow his and his clients’ wealth even under challenging conditions that so often hit the market.
In 2008, Eclectica hit one out of the park, and it garnered both the firm and its founder worldwide acclaim, for it was during this year, in the depths of the worldwide financial crisis, that Eclectica did what very few other firms did that year – post gains. In fact, they brought in returns (31%) that would be impressive in any year, which is when the current widely held notion that Hendry is a contrarian took root.
Since 2008, the shine has come off both Hendry and Eclectica’s bloom, but that hasn’t slowed down the Scot’s outspoken ways and quick wit.
Hugh Hendry does not call himself a contrarian, per se, because he believes that ideas considered outside the norm, if detrimental to what’s current, will be destroyed by the market. In other words, he’s not contrarian for the sake of it; if he makes contrarian plays, it’s only because that’s what given trends at the time dictate.
As it is, Hendry doesn’t believe that hedge funds go against the grain as much anymore; in fact, he believes they’ve become mainstream because hedge fund managers don’t take the risks that they once did, although this is what brings monster windfalls everyone aims for. By not wanting to put up with volatility, as they did in the past, hedge fund managers are more passive. That some hedge funds have gotten so large makes them less apt to take a chance when conditions are favorable than in the past because there’s no urgency to hit one out of the park.
Despite the string of losses that Eclectica has posted for the past several years, Hendry will undoubtedly continue his role of the outspoken Scot looking for the right conditions to hit his and Eclectica’s next home run.