"I Used To Be A Big Deal... And Then A Billion Dollars Walked Out The Door" - Hugh Hendry's Sad Story

Tyler Durden's picture

In a somewhat more manic-than-usual introduction to his 2016 macro outlook, Eclectica's Hugh Hendry - the first of the big bears to throw in the towel and kiss the ring of central planners - admits that things did not turn out quite as he expected, noting "I used to be a big deal", that "I had $1.5 billion in AUM" most of which "walked out the door", and that "life is cruel."

While the entirety of his presentation is certainly worth watching, what specifically caught our attention were the occasional, and rather troubling, streams of consciousness during which we get a glimpse into Hendry's current frame of mind and, frankly, we are a little concerned, because while we have no doubt in Hendry's investing genius (even if he did decide to infamously flipflop in 2013 and many of his LPs decided not to stick with him), the content of what he says is just a little troubling.

Some excerpts:

This morning i ended up in an accident in emergency and I just to dispel any rumors that it involved having superglue on my hands or anything else embarrassing. But I'm back, I'm better, albeit my ear is a little bit ringing. And life is cruel, people keep getting younger. The Joseph Stiglitz interview was broadcast on British TV 6 years ago in 2010.


As I say to my children, I used to be a big deal ago 6 years ago. I was at a party recently with some younger girls who represent some fund of funds in New York, I said "I am in global macro, I run Eclectica"... nothing. They had never heard of me. So if I may continue with the introduction, I feel actually now that I have to.


My shrink says I've got to get over it, that I keep wishing to express my identity. My identity lies in a post-dated envelope which is going to come through my door in ten years time, and on that number is my compound growth rate. I am that silly person who somehow defines myself by performances... I have survived, I am like when you spill red wine on the carpet and you scrub it, and that stain just won't come out, it's difficult to get rid of me. I've been running a global macro fund for 14 years, now one of the longest running London global macro teams, and we have compounded at 8%. I wish it was 18%, I would still be on the beach if it was 18%. But with 8% comes a degree of accomplishment I believe, because that 8% has been accomplished with a set of return that just have not correlated with anything. I am eclectic.


* * *


For two years I didn't take any risk. I had $1.5 billion in AUM. For me that's a big number and I had clients who thought I was negative correlated to the stock market and they were fearful, Investors are fearful: it's one of the most bullish things about stocks today apart from their profound underperformance to fixed income markets.

On his intellectual metamorphosis from bear to bull:

I had a Damascene conversion. I was one of those angry, curmudgeonly Austrian economists. I made over 30% in 2008, I won. My AUM halved. But then you had this QE and all those people who didn't see it, who took the reckless bets, they all came back. We had a chance to kill the vampires and we missed the chance. Purge the system of its rottenness; we failed to do it. That's how I lived; one should never be angry, it's such a negative force and I got over that. I survived for 14 years because I was good at making mistakes.

And then this:

Back to my rant about central banks: they were right, I was wrong. The notion that QE has distorted the integrity of market prices is kinda right, but is kinda right in a benevolent manner because without the courageous intellectual decision by the American Federal Reserve to introduce QE shortly followed by the Bank of England, I think without a doubt we would have had another Great Depression. So QE has influenced the integrity of market pricing because it took away the very real risk of a depression. In that sense, equities are worth more.

So without the "courageous intellectual decision" by the Fed to take away "tail risk" and thus eliminate one of the fundamental tenets of capitalism, namely "risk", equities are worth more? Well, sure. The only question is what happens when the market finally sees through this massive, global experiment in central-planning, one which by definition means that every asset is overvalued. Indicatively we saw glimpses of that before the Shanghai Accord unleashed an unprecedented central bank re-stimulus attempt.

But the saddest part is Hendry's James Joyceian lament of how he lost virtually all of his AUM - it happened when he infamously flipflopped from bearish to bullish in 2013, a shift we profiled in "Hugh Hendry Throws In The Bearish Towel: His Full Must-Read Letter."

A funny thing happened at the end of 2013 I wrote a letter to my new clients and I began with the preface "what if I was to tell you that I'd become bullish on equities; is that something you'd be interested in."


The resounding message no. A billion dollars walked out the door. "What, really, you're bullish?" This is cabaret maybe I should be in show business. Bullishness, optimstic, bearishness, there are adjectives that are very demeaning to the endeavor of global markets.


In 2013 I was flat and I had one client who said "Gee, if only you had been down 15% I could give you more money, but this being flat, I feel uncomfortable."

At this point Hendry proceeds to lay out his returns, proudly noting that in 2014 he made 10%, in 2015 he made 6% (mostly on the back of China), and "this year we are flat" (according to the latest HSBC report as of March 31, as of March 31, Eclectica is down to -5.9%).

He goes on: "I am not very good in the company of others; with the greatest of respect to bank credit analysts I've never had a call from a buddy at Goldman Sachs, JPMorgan, Morgan Stanley, so I am the author of my own mistakes, but I want to tell you I am very, very good at making mistakes."

We honestly hope this is not the latest one. 

His sad story aside, we urge readers to watch the entire presentation below to see how an honest, in their own mind, transformation from crushed bear to just as crushed bull takes place, as well as Hugh's quasi-contrarian view on what will happen to China next as well as to the Renminbi (he completely disagrees with the Kyle Bass view that a major devaluation is inevitable) which he says "is the key to the markets today", something he also touch upon in "Hugh Hendry: "If China Devalues By 20% The World Is Over, Everything Hits A Wall."

Full presentation to Skagen

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Troy Ounce's picture



Never bite the hand that is feeding you

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) Troy Ounce Apr 10, 2016 11:28 AM

He bit the hand that FED him

Future Jim's picture

"without the courageous intellectual decision by the American Federal Reserve to introduce QE shortly followed by the Bank of England, I think without a doubt we would have had another Great Depression."

We ARE in another great depression. The difference is that the stock market is going up because of inflation. Dollars are being printed out of thin air and finding their way into the stock market. I assume that was the plan all along. However, that doesn't produce a future net gain for the economy at all.

scraping_by's picture

Derivatives, equities, and high-end real estate are hyperinflated. Middle class housing and consumer goods are merely inflated. Wages, savings, and commodities are deflated. Infinite printing would have hyperinflated money into wallpaper, except for the ballast provided by the real economy. By segregating air bucks into financial speculation, they lose their value slowly rather than instantly.

Oh, and that's 'intellectual' as in abstract, as opposed to practical.

knukles's picture

So we're all riding on the short bus now includes Hugh or not?

Yen Cross's picture

    Knuks, we've all gone Origami. ;-)


DownWithYogaPants's picture

He can not be blamed for trading in front of the Fed.  

.......You can be sure I'll be watching for when he turns back into a bear.  Cause he will turn back into a bear when the times warrant it.

That's when you know it's time to get out of Dodge.

mtl4's picture

The ultimate irony would be if we get the contrarian market slingshot that catches everyone offguard as pensions and insurance flee gov't bonds fearing default.

Antifaschistische's picture

I don't htink Hugh's gone full retard at all....he is in that game, so he has to play by the rules of today in spite of seemingly rational belief systems...some day, we won't be able to suspend rationale, but over the past 10 years, it has been the only way to make money in that game.   These guys don't care about the price of eggs and butter...the markets are everything.

weburke's picture




which? all? hugh? 

mkkby's picture

Hugh is too emotional.  I would never give him my money for that reason.  One minute he recommends you panic.  The next, he's bullish.

None of these guys are actually hedge funds, either.  Going global in equities IS NOT HEDGING.  You are still super over weight in equities.

A hedge fund should be in fx, commodities, stocks and bonds.  There should be consistent rules for getting in and out of each instrument.  Not just, A FEELING china is the way to go.  Or japan is the way to go.

Ghordius's picture

a hedge fund should not exist in the first place. the only reason why they exist is because banks are allowed again to sign contracts they were forbidden to do: derivatives

I'm fine with private, non-banking and non-insurance firms signing derivative contracts. how many are there?

bring back... sanity. as before 1999. pure gambling, i.e. derivatives, should not be allowed in neither the banking nor the insurance industries

Hugh Hendry claims he tried to "fight the vampires"... with blood-sucking derivatives. how he thought he could achieve that is quite difficult to understand, to me

imo a bad understanding of what markets really are, while thinking that they are something magical, something pure and stronger then human tendencies

RaceToTheBottom's picture

Bright people come up with all sorts of justifications for selling out.

He is a trader, he has to trade.  

In advance of the total reset, what can he do?  

He has to trade, so he sold out.

Ghordius's picture

+1 the brighter a mind is, the more rationalizations it can produce

Hugh Hendry: "I had a Damascene conversion. I was one of those angry, curmudgeonly Austrian economists. I made over 30% in 2008, I won. My AUM halved. But then you had this QE and all those people who didn't see it, who took the reckless bets, they all came back. We had a chance to kill the vampires and we missed the chance. Purge the system of its rottenness; we failed to do it. That's how I lived; one should never be angry, it's such a negative force and I got over that. I survived for 14 years because I was good at making mistakes."

yes, I have to note that many British and American "Austrian School" proponents tend to be angry, curmudgeonly hoping to "kill the vampires"... with markets

imo they aren't "Austrian" enough. as I was writing in Cog's article, the proper Austrian point of view uses history for the analysis of how long an imbalance in markets might last

1971, my prediction was based on the typical lenght of the lifespan of fiat currencies: 40 to 70 years. that gave me as target window the years between 2011 to 2041

as a reminder, central banks don't avoid recessions or crises, ever. the lenghten them and flatten them

so instead of the sharp pain of a short crisis, you get the "pain-killers addled" longer anemic half-recovery half-downturn "recuperation years"

yes, he is a trader, and has the outlook of a trader, which is too short term for a proper Austrian outlook

Pairadimes's picture

Stupid bastards. Central banks are raping their respective economies with these policies, and gradually transferring wealth to the very few who sit at the top of the financial pyramid. Just because the system has not exploded yet does not mean it won't. In the meantime, the consequences of what is now an unavoidable economic collapse just grow larger. Free enterprise is dead, killed by Fed central planning and government hostility to liberty and private property.

TurnwiseWiddershins's picture

Stupid?  Only according to us.

Perspective matters, as does one's own ambitions/goals.

Kissy Ass's picture

Coward is a better description. I hate fucking cowards.

PrometeyBezkrilov's picture

Which means they are not "stupid bastards", they are rather smart bastards. Who is stupid is the general public that over 3-4 millenia has not figured out that they have been screwed using the same methodes. Very sad.

Dubaibanker's picture

Smart, not smart, ugly, beautiful, rich, poor, with or without a degree. LLB or PhD. In Africa or in America..... WE ARE ALL FUCKED!

Unless, of course, you are .....The Goldman Sachs!

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) Dubaibanker Apr 10, 2016 11:53 AM

"Unless, of course, you are .....The Goldman Sachs!"


Whereby, after you die, (IF you ever die), you'll have a nice crispy suntan to go with everything you looted...

Surviver22's picture
This is Donald Trump's most shocking statement yet, However the mainstream media isn't saying a word about it! What are they really trying to cover up??? http://legitorscamreview.com/the-final-bubble/
slaughterer's picture

I would pay good money to see Hugh Hendry and Bill Ackman tear each other apart in a relentless death match.  

KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) slaughterer Apr 10, 2016 1:39 PM

I'd rather just put a humidifier & a de-humidifier in a room together & watch them duke it out...

Kissy Ass's picture

Plumb them together and we're in for a show the likes of which the two financiers could not compete. Close, but...

One And Only's picture

Funny story about biting the hand that feeds you:

Lehman Brothers was the only investment bank that refused to bail out Long Term Capital Management in 1998 when asked by the FED.

Libertati Aut Ad Mortem's picture
Libertati Aut Ad Mortem (not verified) Apr 10, 2016 11:25 AM


KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) Helena Bonham-Carter Apr 10, 2016 11:56 AM

'Judean' ~ The jew Pharisees hated his guts & had him crucified (while 'pardoning' Barabbas), Barabbas clearly worked for Goldman Sachs!


If you want to call Christ a jew, you might as well call me a Republican or Democrat (because I was born in the USA)...

TurnwiseWiddershins's picture

Christianity is a 100% REJECTION of the Pharisaic religio-politico-monetary scheme. 

Why does no one remember that Christ's only act of violence was to whip the shit out of bankster scumbags?

Any so-called "Christian" who puckers his lips up to the scrotum of zionists is no Christian at all, but a charlatan.

Kirk2NCC1701's picture

You need to study Christian history better.

INRI. Jesus Nazaret, Rex Iudaeum. Jesus of Nazareth, King of the Jews.

All you know officially of Christianity, comes from the Roman Catholic Church, and their Editor-compiled NT at the Council of Nicaea, in 325 AD. As a matter of Forensics, we do not and cannot know what actually happened, but we may use modern archeological findings to determine some things that did NOT happen.

All subsequent writings (even or especially all Protestant and Mormon versions) are a spin on the Catholic spin.

any_mouse's picture

Study Paul and his Letter to the Galatians. Judean followers of Jesus were left in the dust as Paul came up with the Christ, the resurrected Jesus, and a separate theology from the Hebraic traditions of the Judeans. The Last Supper was a Passover seder. Jesus kept Kosher, observed the Sabbath, and followed other traditions.

Paul had a flock of uncircumsized adult Gentiles following him to Jesus and they weren't going to go under the knife willingly. Paul needed to distance the Christ from the Jesus with Judean roots.

Paul does it all in Galatians.



KesselRunin12Parsecs's picture
KesselRunin12Parsecs (not verified) any_mouse Apr 10, 2016 7:15 PM

"observed the Sabbath, and followed other traditions."


Fuck off... Using my metaphor above... If I register to vote (because I need a 2nd form of ID to buy a gun), does that make me a Republican or Democrat?


Here, I know... (even better)


- I'm already circumcised, baptized, had a confirmation

- But now I'm gonna start eating kosher food, celebrating Hannukah, painting Lambs blood on my door

- Plus, I'm gonna kneel down on a carpet facing Mecca 5x a day and pray to Allah

- Sign the cross everytime I pass a graveyard, get ash put on my forehead on a Wednesday in February

- Get married & put my wife in a burka, then be a polygamist


So what am I? A Catholic?, a jew? a Muslim? or a Mormon?



any_mouse's picture

The markets are distorted by Central Bankers. It goes from one illogical top to the next.

The problem isn't prognosticators calling multiple tops.

The problem is the market is broken and no longer behaves rationally.


SixIsNinE's picture

here is a presentation by Walter Veith on "Who Owns the World"

he makes a pretty convincing argument that the Christian Protestants have lost - the Vatican has won


very interesting how the plan to merge the religions together gathers pace.  in fact, in yesterdays corporate p.r. was indeed a story about the Pope saying religion needs to be more "inclusive"

The_Dude's picture

Jesus was not a Jew...at least not the Talmudic flavor we have today.


TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) celticgold Apr 10, 2016 1:42 PM

This guy was the original Kyle Bass on ZH, where every story now praises the wisdom of Kyle Bass.  There used to be a ton of videos on the genius of Hugh Hendry.  Then his fund started underperforming and ZH stopped covering him.  No surprise here, just like the people in the Big Short movie, you can make one wise bet and make a lot of money just don't expect me to crown you a genius.  Take your winnings and move along.  I've noticed that the remarks of Kyle Bass' genius have slowed down as well.  My guess is we will see a similar story of the shut down of his fund in a year or so.

anarchitect's picture

As to his performance, and that of Bass, it could well be a case of Harry Browne's wisdom that "the investment guru with the perfect track record up to now will lose his magic touch the moment you start acting on his advice."

As to his big drop in AUM, what did he expect?  As a bear, he attracted investors who were on the same page.  When he changed his tune, many of them left.

BorisTheBlade's picture

Billion dollars walked out the door? Waive them goodbye and wish them luck, you never owned them.

Kissy Ass's picture

These brits and their skinny jeans. It's fucking disgusting.

Tinky's picture

I'll always, always have a soft spot for him thanks to his takedown of Stiglitz. Devastating.


Drachma's picture

He lost me at "My shrink...". This just confirms what I've suspected all along, that Hugh is mentally ill. What drove him to this illness? The same people he capitulates to in his bullish re-incarnation.

scraping_by's picture

A shrink is a status symbol. What we used to call a 'snob badge'. I'm so complex and sensitive, none of these simple, direct, practical, skilled peons understand me. Tortured genius. Seen the other side, and all that. Sheee-it.

SixIsNinE's picture

 + that "shrink" is also the drug dealer ...  Big Pharma Baby !

from the photo he's looking very thin ... probably prescription amphetamines and a benzo or two to chill and take the edge off ...


o/t :  Samsung has put the patent on contact lenses which take video and sync to smartphones

GeoffreyT's picture

Psychiatry is the modern equivalent of phrenology, and is the ultimate in pseudo-scientific charlatanry.Small-N, p-hacking, end-point grifting charlatans who make Scientology look good by comparison.

The only reason a person of genuinely above-average intelligence has a shrink is because they want Modafinil or Adderall... but don't want to get it on the black market.

I'm not sure if any of Hendry's mandates require periodic (or random) blood-and-piss testing, but it wouldn't be too much of a surprise (e.g., if he gets inflows from dealer groups or fund-of-funds folks). $1.5b is barely enough FUM to pay a living wage, even on 2&20 - because there is a fucking shitload of back-office and regulatory cost that exhausts 1.5@200bps almost immediately.

Anyhow... point being: a lot of folks who manage money for a living can't go around with Modafinil in their systems unless it's prescribed. That's the only reason to ever darken the door of a psych-charlatan, whether -ology or -iatry.


And doing brain work without Modafinil is like running hurdles wearing flippers - don't even try it if you want to be competitive.

NotApplicable's picture

How the fuck did this guy ever succeed at anything? From what I see, not a single one of his opinions have any basis in reality.

He seems to be a prime example of a clueless egomaniac being lucky enough to be in the right place at the right time.

GeezerGeek's picture

Maybe he just needs a hug and a participation trophy.

Yen Cross's picture

lol... Everyone is a winner under that [Garden K[g]nome] aka Mr. Yellen [Moe Howard]

 JFC! Do I have to spell it out for you?