Eclectica Asset Management’s funds under management have fallen by 87.5% in three years.
The firm, led by Hugh Hendry (pictured), experienced a further 27% fall in assets under management (AUM) from £182 million to £135 million, according to its full year results ended 31 March 2016. Back in March 2013, the hedge fund firm’s parent group, Eclectica Services, reported AUM of $1.35 billion (£1.08 billion).
The company, which houses Hendry’s Absolute Macro fund, saw its most dramatic fall over 2014, which prompted it to slash its staff headcount.
Given the firm has significantly reduced AUM – and therefore revenue – Tim Arengo-Jones, Eclectica’s chief executive officer told Wealth Manager: ‘Obviously, when you have close to a billion dollars under management you can afford more staff so that was just part of the cost-cutting that we had to do with the fall in AUM over that period in summer 2014. So we needed to do whatever we needed to do – and these days you can outsource various things.’
According to the firm’s accounts, the 13-strong staff was cut to six, with two junior members from the investment team, four from administration and one from the marketing team leaving. This reduced staff costs by 59% to £562,000 in its last accounting year.
Eclectica also suffered a slight decrease in turnover from £3.8 million to £3 million mainly due to a reduction in management fee income.
Despite this, reduced administrative expenses, at £1.7 million for the year, and an intake of £1 million in performance fees, up 62.5%, helped deliver £1.4 million of profits, up from £984,000 in 2015.
The increase in performance fees is attributed to the performance of the firm’s offshore fund over 2015. The highest paid member of the partnership received £180,000.