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Alternative Market Briefing

Hedge fund manager Hugh Hendry says 'contentious posturing' is paying off

Thursday, April 23, 2015

Komfie Manalo, Opalesque Asia:

Hugh Hendry, founder of the hedge fund Eclectica, said that his decision in 2013 to turn from a bearish to a bullish stance is starting to pay off – in terms of returns. Speaking to an Auckland audience via Skype from the UK this week, Hendry said his hedge fund, which he founded in 2005, was now up 14 to 15% this year and is currently one of the 10 best performing hedge funds.

According to NBR, Hendry said that his fund gained 8% in 2014 after disappointing returns in the two years prior to that. Since Hendry started Eclectica Asset Management in 2002, it has averaged a 9% compounded return.

Hendry told Auckland’s private investors that the fund’s franchise was "contentious posturing" and that the most contentious thing you can say today is that you are bullish - a posture he adopted in 2013.

But his assets under management fell from more than $1.5bn to $300m today after he told clients two years ago that he would leave his bearish outlook behind.

"What that tells me is I am the worst manager of a business you can imagine. It also tells me there is a profound bull market fear, people are just terrified that 2008 is going to repeat itself, that it’s going to be Greece, or Chinese collapsing, or Treasury bond yields surging higher."

The two last clients to fire him were two large Nort......................

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