It was strange watching Eclectica’s Hugh Hendry on Newsnight earlier this week. He straddles two worlds, in one a demon or is that demonised hedge fund manager. In the other, the retail fund manager considered by IFAs to be part of their world who at times has done pretty well at maximising their clients’ savings and investments.
In the past, I have, perhaps a little tritely, divided financial services into good financial services and bad. In my black and white world I’m not sure where to put Hendry.
This week’s broadcast saw Hendry showing a Newsnight reporter around his West London office. Hendry came across as impressively intelligent and enthusiastic, turning up in the morning at a civilised time – no wide eyed master of the universe here. The firm’s positions in various assets and instruments are outlined on a white board in marker pen. Much of his day, he said, involving reading books. Slow burn hedge fund management or something like that. He gets a million or two mandate into one of the long funds, loses out on a position, defends his role over Greek debt and indeed his right to make a lot of money. The message from Hendry is don’t shoot the messanger.
I found it odd watching. Should I be a fan of Hendry representing the hedgies? I’m not sure. On one front he certainly complicates things for countries trying to cope with crises. There but for the grace of god and, er, Fitch, goes the UK. On the other hand he may be basically correct. The speculators, when what they do is looked at in the round, may merely be showing fundamental weaknesses that need addressed sooner rather than later.
However, I wonder in the next bit of the programme - back in the studio - if Hendry did well facing a hostile MEP. The MEP for the Socialist group in the EU Parliament was adamant. Hendry’s shorting days were numbered. We are passing legislation that will stop you doing what you do at the moment i.e. taking short positions on Greek debt and no doubt anyone else’s too.
It is a strange debate - continental MEP versus hedge fund manager. Would a UK politician have been better? Would a UK politician have wanted to be seen going into bat for what is surely an unpopular cause most places outside Mayfair?
Of course, TV isn’t the real world is it? So here might be the rub. When the directive comes in and if that is before the summer, it is quite possible that we won’t have an established Treasury team to fight off any inconvenient details. It is just possible that Hendry can win any argument he wants, but he might just lose the war and see his freedom of action seriously curtailed.
