Hedge-fundmanager HughHendry ofEclectica AssetManagementmade his nameby betting ondisaster duringthe globalfinancial crisis.In 2008 hisflagship fund returned more than 30%,in part due to shorting banks. In recentyears he has become notably lessbearish than many high-profile peers especially regarding China, wheresix years ago he was concerned abouta potential crash.
Today, he thinksspeculation that China will devaluethe renminbi is wildly overdone."China doesn't concern me," he toldBloomberg recently. "I think China,as it is demonstrating, has the powerto move on without any catastrophicconsequences in terms of having tore-value its currency."
Hendry is alsobullish on Japanese equities, on thebasis that policymakers will continuewith their policy of negative interestrates, and on European stocks.However, he thinks the asset bestplaced to cope with any "vial ofpoison" the market can throw at it isGerman residential property, he toldReuters last week. Whether Britainvotes to remain in the EuropeanUnion or not will make no difference.
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If the EU survives, German assetprices should appreciate. If it doesn't,German bond yields should fall,making property there even moreattractive. "The cheapest asset inthe world, relative to the prices of itsdomestic bond market, is Germanproperty." He is also confident that itshould offer a safe haven even if hisoptimism about China is misplaced.If the renminbi were devalued,"I think you would come full circle andcome back to a huge currency crisisin Europe. The euro would break upand I would end up owning Germanproperty, which would now be valuedin deutschmarks."
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