Hugh Hendry is a rare breed: a retired hedge fund manager who has actually retired.
Lately, the former manager of the Eclectica Fund, a London-based global macro outfit he ran for 15 years until shuttering it last year, spends his days unsubscribing from finance-related emails and paddle boarding near his estate in St. Barts, where he has been spending much of his time. His Bloomberg terminal, once a fixture of his daily life, has been packed up and hauled away. It’s a picture befitting the man who declared on TV that he’d “died in active combat” when his fund shut down, following several years of struggle and, before that, stellar gains.
But Hendry, 49, has never minced words. Over his career at Eclectica Asset Management, Odey Asset Management, and Scottish firm Baillie Gifford, the pugnacious Scotsman gained a reputation as a provocateur, figuratively flipping his middle finger at investment conventions, class structures, and whatever else irked him.
He also didn’t get the memo that hedge fund managers are supposed to keep low profiles, making enough television appearances to populate a YouTube channel. The intellectual bomb thrower once called former Danish prime minister and European Parliament member Poul Rasmussen a “Champagne socialist traveling business class on the back of money created by risk takers like me.” Another time he snapped “Hello, can I tell you about the real world?” at Nobel laureate Joseph Stiglitz on BBC’s Newsnight program.
“I was larger than life,” Hendry tells me via telephone from his home in St. Barts on a recent February afternoon. “I was saying to investors, ‘I dare you, give money to the crazy guy.’”
And they did. The fund managed $1.3 billion as recently as 2013; those who took the plunge early earned stratospheric returns. Eclectica returned 50 percent in 2003, its first full year of operation, and produced another double-digit gain in 2005. The year that truly cemented Hendry’s reputation was 2008: He earned 32 percent as the MSCI World Index plunged more than 40 percent.
But the past few years have not been kind to global macro fund managers, Hendry among them. Several former hotshot managers have produced lackluster returns since 2013. And though Hendry changed his bearish outlook several years ago, correctly predicting that the global economy would continue to improve, he was unable to convert that forecast into gains, and investors didn’t like his new attitude. When he closed Eclectica in September 2017, the fund was down 9.4 percent for the year and its assets had dwindled to $30.6 million.
Throughout it all, Hendry grew frustrated that investors wanted him to serve as “disaster insurance,” as he once told the Financial Times. “Part of the decision to walk away is that [global macro] has been redefined in terms of the scope of the mission,” he tells me. “When I started, it was one of the greatest honors that you could bestow upon a money manager because you were saying essentially, You can do whatever you want. As I began to recognize through ’13, that rule no longer existed. An industry had been created, and people were seeking captains and sailors, not pirates.”
Hendry says he “came to realize the futility of fighting with your clients” and suffered a kind of intellectual burnout before finally giving up. Relaxed and affable in conversation, he seems to have made peace with the decision to pack it in.
Hendry was born in Glasgow, Scotland, where his father worked as a truck driver and his mother was a receptionist. He was the first in his family to to go on to post–secondary education; he went to the University of Strathclyde, living at home with his parents and commuting to school. For a teenager, he was unduly serious, applying an intense work ethic to his studies in an accounting program. “I was just a weird, weird kid,” he says. “I didn’t drink, I wasn’t a party animal. I had the fortitude to recognize that this sense of wanting to run away could best be accommodated via the means of education.”
Hendry joined Baillie Gifford straight out of school, and spent eight years there. He values the experience but says it was a poor fit. “Really all I created was a name in terms of being a troublemaker within that organization. It ended up being really quite a miserable, unhappy time, albeit I did take away a very sound education.”
Then Hendry moved to London, where he found himself “somewhat randomly” at lunch with Crispin Odey, iconoclast and founder of Odey Asset Management. The two had instant chemistry. “I guess he was looking for a troublemaker,” says Hendry. “His genius was his curiosity and ability to capture change. And that’s exactly what I was looking for at that point.”
If Baillie Gifford had given him a rigorous analytical framework, Crispin Odey taught him how to blow it up and go rogue.
“He was a finishing school,” Hendry says. “Crispin is larger than life, and the impetus was all on sort of misbehaving. I’d been taught that intellect was austere, and here was this playful intellect. And he was willing to tolerate my own idiosyncrasies.”
At Odey, Hendry became the lead portfolio manager on a mutual fund and started the Eclectica hedge fund, which he spun out in 2005 as an independent entity.
Crispin Odey was not happy. “It felt like a divorce,” says Hendry — but Hendry felt indebted to his former boss, who had taught him how to run a classic global macro fund: going short, trading currencies and bonds, and pursuing whatever strategies struck his fancy.
Eclectica’s gargantuan 32 percent gain in 2008 might have catapulted the fund into the big time. Instead, investors needed cash after the global rout, prompting them to yank money out of any liquid investments they had, including Eclectica, which saw its assets sink to below $100 million.
Eclectica’s returns never again reached their earlier heights. Ultimately, after 15 years of Hendry’s managing Eclectica, the fund compounded at between 7 and 8 percent. “Many people seem to be opinionated about that,” says Hendry. “All I would say is that those were completely independent returns that did not have the benefit of any form of market beta.”
These days, when asked what he’s up to, Hendry immediately replies: “Having therapy.” It’s only half in jest. “There’s definitely a trauma that comes from living a life where periodically you think ‘I’m dead’ ” if you have losses, he explains.
He’s also, for perhaps the first time in years, having fun. He’s learning to sail and play tennis. As if to make up for his abstemious teen years, Hendry enjoys a glass of wine here and there. And he’s preparing to move his family to Paris, where he can perfect his fledgling French and his three children can continue their education.
He keeps an eye on the markets, albeit without the Bloomberg or his employees who ran it. “You might as well launch one of these Elon Musk rockets from Bloomberg terminals, they’re so damned complicated,” Hendry muses. “I occasionally have a look at the chart system on the Yahoo! Finance site. I’m kind of like some amateur old guy.”