‘It wasn’t meant to be like this’: Hugh Hendry’s farewell letter than three years later he quit Odey to set up his hedge fund boutique Eclectica. Below we repost his full final letter in its entirety, and wish Hendry good luck in his next endeavour. * * *. CF Eclectica Absolute Macro Fund. Hugh Hendry is back with a bang after a two year hiatus with what so many have been clamoring for, for so long – another must read letter from.

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Hugh Hendry Is Back – Full Eclectica Letter | Zero Hedge

And so we fear a storm is coming. At the time, he saw politicians making a show of railing against the industry.

We wrote at length last month about our view that falling oil prices are a benefit rather than a threat for the majority of the world economy.

Eclectica Asset Management — Hard hats and sunglasses To conclude, our current views can be broadly summarised as follows. He also thinks they are the political opposition. I suspect he would have made a fine macro manager. Can I tell you about the real world? The collapse in volatility since seems to resonate with the drawn out process of QE in the US and its slow spread across the world.

We still see the global economy as grotesquely distorted by the presence of fixed exchange rates, the unraveling of which is creating financial anarchy, just as it did in the s and s. And unlike equity volatility it does not tend to trade in lengthy and definable regimes; it is never a great idea to go long equity volatility just because it happens to be low.

It seems to me that wage or cost push inflation is far more difficult to prevent and contain than asset price inflation. To some, the country has gone from a credible reforming sovereign play to henry caught up in a Asian crisis like scenario where the level of the peso determines the tightness of monetary policy with the domestic economy punished by the consequences.


Hugh Hendry Eclectica Fund Investor Letter ~ market folly

He became an unlikely spokesman for the industry, getting into spats on Newsnight with economists Joseph Stiglitz and Jeffrey Sachs over the ethics of short-selling. With only one Fed hike priced in until the end of any further contractions are likely to be driven by outright recession. Back then, with a 7. However if an inflationary path like is gestating then I fear there is very little chance that anything timely will be done about it. Look at the graph below, the unemployment rate red is at lows, job openings blue have increased beyond the hiring rate teal and are now approaching the unemployment rate for the first time since the Job Openings and Labor Turnover Survey data began.

Hugh Hendry, who closed his London-based global macro hedge fund Eclectica Asset Management last September, believes the hedge fund industry suffers from a chronic shortage of pirates.

Never Miss Hendrg Story! Managers, and Lette must count myself in this camp, feel compromised by our poor absolute returns since and we find ourselves unable to put up much resistance to this FAKE NEWS.

high Essentially, therefore, it seems that you need a recession to appear to make money in US fixed income markets. Eclectica Asset Management remains cautiously constructive: He can always say he tried.

But any steepening of the curve sufficient to raise bank profitability would tighten policy in the real economy, kill off hencry nascent recovery and condemn the continent to further penury and the resulting surge in populism that a lack of economic hope engenders.

Risk assets should continue to trend positively.

As you know, I have a proclivity to make money in a bear market. Today it trades around basis points. Popular job sectors Popular job sectors Loading Maybe that was the easy bit.

Looking at the one year implied volatility on 10 year swaps, the cost of entry seems reasonable even compared to the narrow trading range we have seen this year. Hendry studied Accounting and Economics at Strathclyde. Successful but contentious macro risk posturing. As I am sure you by now know, I am nothing but a worrier. It would distribute incremental dollars to those with a much higher propensity to spend. Hugh Hendry’s Eclectica hedge fund is no more. If anything we feel more convinced that our thesis of a healing global economy is understated: Several years later, inthe Fed suggested a reduction in the pace of its QE program.


Hendry received his own schooling in maverick trading during his time with hedge fund icon Crispin Odey. I am not seeking that kind of “edge. And then in February they posted a poor inflation print that moved the core rate to 2.

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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.

In an interview five years agoHendry says he hehdry pretty unemployable in London after leaving Credit Suisse: The finance ministry seems determined to succeed.

Not 17th century sailors, but the s hedge fund pioneers. I am perhaps doing him a gross injustice, but I would summarise as follows: And a segment that all the Whitney Tilsons of the world should read: My contention is simply that fixed income volatility has over shot to the downside, that such moments are fleeting and that you are not necessarily dependant on a correction in treasury prices. And despite the very weak start to the year for stocks our risk management and the robustness of our positions has moderated drawdowns and allowed us to selectively add risk.

Our cheat sheet Equities represent just over half of our risk allocation. The Fund’s ten-year NAV progression demonstrates this survivorship bias; when bad things have happened, we have made money. Someone once said we should think of the world as a sentence with no grammar. And so they came out all guns blazing.

Recent events come on the back of a period of profound Mexican peso weakness; indeed since the end of November the peso has been one of the worst performing currencies in the world.