Brookes adds Hendry fund

Cazenove Capital’s head of multi-manager Marcus Brookes has bought into a hedge fund from Eclectica star Hugh Hendry, as a hedge against volatility in Chinese stockmarkets.
Mr Brookes has bought into Mr Hendry’s Eclectica Hedge fund, which is also tipped by Aviva Investors’ multi-manager Peter Fitzgerald in this week’s magazine.
“It’s pretty much the most cautious fund we have in the Diversity range,” said Mr Brookes.
“This fund will make decent money if China has a wobble.”
Mr Hendry began raising concerns about a Chinese slowdown in 2009. In a letter to clients earlier this year he said he was more pessimistic on Chinese growth than ever.
This stance led him to be bearish on most Asian stocks and industrial commodity prices and interested in some US stocks.
Mr Hendry said he was also “deeply concerned” that Japan could become the focal point of the next global downturn.
The Eclectica fund makes up 3.1 per cent of the £808.2m Multi-Manager Diversity and 2 per cent of the £24m Diversity Income fund.
Mr Brookes said he believed rival investors were too optimistic on the future of China, and there is evidence to suggest that it will not lead the way economically in the next century as some experts expect.
“Investors may well have forgotten that big stimulus package in 2008 by the Chinese which is fading now,” he said.
“The Chinese managed to blow a property bubble just like the US and UK did.
“Also the demographics are poor and also the potential of a strong dollar is negative for country.”

The manager said he was also avoiding UK sovereign bonds.
“I would not put money in UK gilts,” he said.
“Something that is yielding roughly 1.9 per cent with inflation at 3 per cent is a concern.
“I would expect capital loss and would prefer to hold cash or cash equivalents.”