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Hedge fund founder Renée Haugerud works in a corner office of the landmarked Beaux Arts Scribner Building on New York City’s busy Fifth Avenue. But the ideas that brought her here are rooted in a tiny log cabin near Montana’s Blackfoot River, surrounded by groves of larches, Douglas firs, lodgepoles, and ponderosa pines.
“I think every lesson in trading,” says Haugerud, who graduated in 1980 from the University of Montana School of Forestry and is now the chief investment officer of Galtere, Ltd., “you can learn from nature.”
Haugerud has managed assets worth a billion dollars. One of three funds she oversees, Galtere International Master Fund, has for the past fifteen years averaged annual returns of more than 12 percent—better than other Wall Street funds many times older and more famous. She accomplished this, notably, in an industry where 97 percent of hedge funds are run by men.
“I like to think of Renée as this amazing character out of a Western movie,” says Janet Hanson, a former Goldman Sachs executive who founded the women’s networking group 85 Broads. “She really blazed a trail for herself in a way I’ve never seen anybody with her background do.”
Most unique about Haugerud’s rise through the rarefied air of Wall Street is her earthy pedigree. No old fortune, Ivy League, or Northeast estate gilds her background. Instead, she grew up a sheriff’s daughter on a Minnesota farm. Then she moved west to Montana—where a bull market is a livestock auction, and a bear market is a huckleberry patch—and learned about trees, innovative thinking, and, eventually, loss.
“I admire her career; she’s very smart,” says Karen Finerman, a CNBC personality and CEO of New York’s Metropolitan Capital Advisors. “And I don’t know that I can name anyone else with a Bachelor of Science in forestry.”
It was by studying forests in Montana that Haugerud discovered key insights that she would apply to finance on Wall Street.
“Pattern recognition is one of my strengths as an investor,” Haugerud says in a phone interview. “And I really believe I got that through my courses and great professors at UM—specifically in dendrology.”
Haugerud, whose blond locks came maternally from Norway and whose blue eyes came paternally from Ireland, was born the first of four siblings in a southern Minnesota farming town called Preston, population 1,800. Her father, Neil Haugerud, a farmer, was elected sheriff in 1959 of the half-million acre county, named for thirteenth U.S. President Millard Fillmore.
“She talks about growing up on a farm in Minnesota all the time,” says Kathleen Kelley, founder of Queen Anne’s Gate Capital Management. “It gave her great insight into agricultural commodities.”
At the age of three, Renée moved with her family into the sheriff’s quarters in the front of the two-story, red brick Fillmore County jailhouse. Her mother, Helen, once a teacher in a one-room rural schoolhouse, cooked meals for the prisoners. One of young Renée’s chores was to deliver their breakfasts.
The incarcerated were, Sheriff Haugerud writes in his 1999 book, Jailhouse Stories: Memories of a Small-Town Sheriff, “honorable, eccentric characters who happened to be alcoholics, just plain drunks, thieves, burglars, robbers, doctors, lawyers, judges, farmers, and ordinary citizens.”
In a varied résumé that included a tour of duty in Korea and an appointment by President Jimmy Carter to a conservation commission, Sheriff Haugerud also was a pilot. And he knew a little about investing. In a small plane, he flew his eldest daughter over Iowa cornfields and explained how she could sell those strangers’ crops—in a sense—via the futures market for commodities.
Since before she lost her first tooth, Haugerud read books on business. She showed her entrepreneurial spirit by selling lemonade at a stand across from her town’s Lutheran church, and also canned goods out of the jailhouse basement. Primed with such business acumen, she took to the idea of commodities futures like a sunfish to a kernel of corn.
“I was hooked,” she says.
But she also loved to camp in a tent in the big jailhouse backyard at the base of a walnut tree where a hooting owl lived. When it came time for college, Haugerud decided to study forestry.
“I wanted to get an education in something that I wouldn’t learn on my own,” she says. “Like a chef might eschew a formal cooking school, I didn’t want a business degree to contaminate me.”
She took prerequisite science classes at universities in Minnesota and Wisconsin and in 1978 transferred to the University of Montana.
“I loved the out of doors, and when I got to the nitty-gritty of actually getting the degree,” she says, “I thought I should go somewhere where the trees are.”
She rode a train to Montana, her clothes in a trunk, having never before visited Big Sky Country. She thought herself an atypical student, not shy, but not interested in joining clubs—just “wanting to do the real hard-core forestry stuff.” She skied some, hiked the M plenty, and when she yearned for wilder mountains, she tagged along with student backpackers bound for the Continental Divide Trail in Glacier National Park.
She also lived in a dorm room in Jesse Hall and was paired with a roommate. This young woman, a Butte native with dark brown hair and green eyes who transferred her junior year from Montana State University to study nutrition, was named Cindy Sample. In personality and temperament, Sample was Haugerud’s opposite. Naturally, they became best friends.
Sample brought Haugerud home to Butte for Easter dinner. After the meal, the two friends rose with Sample’s mother to clear dishes from the table. Sample’s brother stayed seated. In front of the whole family, Haugerud called him out for not helping.
“I said, ‘Well he should be!’” says Cindy’s mother, Marlene Sample, with a laugh. “Renée is just a very wonderful, unique little gal. She knows her mind, and she just took the hearts of the whole family.”
Together, Haugerud and Sample road-tripped to Minnesota to celebrate St. Patrick’s Day, split sandwiches in Missoula at a spot called Alice’s Restaurant, and visited Butte often, where Sample’s father told Haugerud that she would be the first woman president.
Then Haugerud moved to that cabin in the Lubrecht Experimental Forest. A young professor taught her the dendrology lessons that cross-pollinated with her business ideas. She learned dendrochronology, the study of tree rings and how to see into the past to tell the best years for growth. She also learned ecophysiology—how all plants and animals interact in an ecosystem. She realized that by coupling the principles of dendrochronology and ecophysiology, she could spot the first signs of change in any environment.
“My dendrology courses—identifying plants, species, understanding their environment, the importance of recognizing one small pattern, one small divergence,” Haugerud says, “gave me some of the best tools for microanalysis of markets, stocks, and currencies that I’ve ever had.”
She graduated with honors in June 1980 with a degree in forest resource management. But she never considered working in the woods. She took a job back in Minnesota with agribusiness giant Cargill, her employer for the next thirteen years.
She came back to Butte once, memorably, for Cindy’s wedding. She was a bridesmaid. Marlene says she couldn’t help but notice how her once-shy daughter had changed to be like her best friend—confident, assertive, and outspoken. At the reception, Marlene remembers that Haugerud deftly rebuffed bachelors and heard again the father-of-the-bride say she’d be a fine president.
Trading in global financial and commodities markets now, Haugerud moved from Minneapolis to Geneva, and then to Hong Kong. She was living in Melbourne, Australia, in 1990 when she traveled again for Cindy, this time to Maui, a paradise Sample wanted to visit while she still could. She had leukemia.
Speaking by phone from her office in Butte, where days earlier Haugerud called just to say hello, Marlene remembers that trip.
“Renée got on a plane so she could see Cindy,” she says. “Such a nice gal. What a sweetheart.”
Cindy Sample died in 1991.
“I’m still friends with her family,” Haugerud says.
In 1997, Haugerud invested $5 million and founded her hedge fund, Galtere, a name that means “pragmatic simplicity.” With a foundation in commodities trades, in 2002 Galtere shot up a remarkable 61 percent. Still, the fund had just $12 million in assets. Haugerud had trouble attracting big investors—almost exclusively men.
Among the bolts holding down this glass ceiling, Haugerud says, was a backhanded notion that while women investors wouldn’t lose much money, they wouldn’t make much either—this despite data from Hedge Fund Research, Inc., that showed that between 2000 and 2009, hedge funds run by women had almost double the returns of hedge funds run by men. Another was a kind of psychological dogma that made many investors trust only a myopic kind of market research.
Haugerud viewed this problem through the prism of her UM classes in dendrology. She saw too many analysts look only at the past performance of stocks. These were the strict dendrochronologists of the investing world—men who relied solely on tree rings for hints as to how well a financial forest would grow.
Haugerud’s investments at Galtere were imbued with the financial equivalent of ecophysiology. She scoured stocks’ tree rings but also did deep research on a host of other environmental factors: market trends, political changes, cultural shifts, monetary adjustments, and scores more. She made artful choices.
“The science of trading basically ponders the past. The art of trading focuses on the future,” Haugerud says. “The art of land management is, wow, how do you tweak it so it becomes healthier—to decrease disease, increase diversity, and achieve your desired outcome. Investing is the same.”
In 2003, Haugerud broke through. She reached out to a man named Gary Jarrett, who runs Cargill’s hedge fund, Black River Asset Management, LLC, and once was Haugerud’s boss. Cargill invested $60 million in Galtere. Like a wave of dancers following the first brave soul out onto the floor, new investors flooded to Haugerud. The bolts that held the ceiling popped. In a few years, Galtere was managing $2.4 billion. In 2013, Business Insider named Haugerud one of the twenty-five most powerful women on Wall Street.
“She is a singular and original thinker and not a recycler of other people’s ideas,” Jarrett says. “She connects dots in ways others might not.”
In 2009, Haugerud and her husband, John H. Murphy, gave $1.5 million to the University of Tennessee in Chattanooga, where Murphy went to school and where the couple keeps a home, to found the Galtere Institute. Its purpose, Haugerud says, is to teach investing from the perspective of women.
“I’ve always felt that male-dominated careers should have more females in them,” Haugerud says. “And I think that contributes to diversity not from an altruistic conception, but in a globalized world, the more you have a diverse work environment, the more you understand, the better off you are.”
Beyond gender equality, Haugerud says the purpose of the Galtere Institute is to infuse investing with a sense of psychology. Wall Street, she says, is saturated with left-brain thinkers—people who are analytical, linear, and objective. It needs more thinkers who can intuit changes, find parallels, and spot patterns.
“There’s a paucity of right-brain thinking in investing, and part of that is because there are so few women,” Haugerud says. “If you want a diverse portfolio, look at your investing team.”
With Haugerud thus committed to broadening the scope of how finance is taught, it’s worth circling back to UM in 1979 to note an important teaching change that came to the forestry school.
Fresh from earning a Ph.D. in forest ecophysiology at Colorado State University, a new professor took a job at UM. His course: dendrology. But instead of just drilling names of plants and measurements of tree rings, as had been done before, he taught principles of biology, ecology, and ecophysiology.
“I will never forget my dendrology course,” Haugerud says. “I had an excellent professor.”
It was Steve Running, whose intellectual might was recognized by the world community in 2007 when a panel he served on was awarded a Nobel Peace Prize for contributions to our understanding of climate change.
When reached at UM, and told of the former dendrology student who partially credits his lessons from a forest with her fortune from Wall Street, he laughs.
“That really spun my top,” Running says. “What a great example of the value of a liberal arts education and how you learn to think and translate it into a new field and become successful.”
Nate Schweber is a freelance journalist who graduated from UM’s School of Journalism in 2001. His work appears regularly in The New York Times, and he is the author of Fly Fishing Yellowstone National Park: An Insider’s Guide to the 50 Best Places. He lives in Brooklyn and sings in a band called the New Heathens.