Hugh Hendry's Eclectica Asset Management Said To Close

Sep 14 2017 | 11:31pm ET

Famed hedge fund manager Hugh Hendry is reportedly shuttering Eclectica Asset Management following performance declines in its flagship fund and a reduction in AUM from more than $1 billion in 2013 to less than $120 million. 

Hendry, who founded macro-focused Eclectica in 2005, came to prominence after posting gains of 31% in 2008 by betting against financial sector giants in the U.S. and Europe during the financial crisis. 

News of the closure was first reported by Bloomberg on Thursday, citing an investor letter. The firm’s flagship fund is reportedly down -9.4% for the year to date through the end of August, Bloomberg said. 

In the investor letter, Hendry noted that formal notification letters had been sent to all registered account holders with details of the redemption process. Further details about when investor capital would be returned were not available.

Hendry added that it is “especially frustrating” since the economy has performed well through the summer and he is “more convinced that our thesis of a healing global economy is understated: for the first time in an age, all parts of the world are enjoying synchronized economic momentum.”

Nonetheless, the letter continued, the fund’s “substantial risk book became strongly correlated over the short term to the maelstrom of President Trump and the daily news bombs emanating from the Korean Peninsula.” Hendry also echoed a common refrain among hedge fund managers with comparatively small amounts of AUM, noting “the increasing regulatory burden which makes it almost impossible to manage small pools of hedge fund capital today” among the reasons for Eclectica’s closure. 

Hendry also commented on his broader market views in the letter. “The implications of a sustained bout of economic growth are good…because it should continue to underwrite a continuation in the positive performance of global equities."

"I would stay long," he wrote. "I can’t see interest rates rising abruptly to interrupt the upward path of equities."

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