E. Lee Hennessee, Early Woman in Hedge Fund Role, Dies at 64

  • She founded investment advisory firm and peformance index
  • Named among New York’s 50 most-powerful women, by newspaper

E. Lee Hennessee, who started one of the first hedge-fund advisory firms and created an industry performance index before getting ranked among New York’s 50 most-powerful women, has died. She was 64.

She was found dead Oct. 29 at her home in West Palm Beach, Florida, by her husband and business partner, Charles Gradante, according to an e-mailed statement from Chase Scott, a family spokesman. Authorities are awaiting lab results to determine the cause of death, Lori Colombino, public information officer for the West Palm Beach Police Department, said Monday by telephone.

E. Lee Hennessee

Source: Hennessee Group Llc.

Hennessee was chairman and managing principal of New York-based Hennessee Group, the hedge-fund research and advisory service. She discussed the industry in frequent appearances on CNBC, CNN and Bloomberg Television, and was widely quoted in the financial press. 

She founded her firm in 1987 as a unit of E.F. Hutton. “When I got there, I asked, ‘Where is the hedge fund research?”’ she recounted in a 2003 interview with the Raleigh News & Observer, her hometown newspaper in North Carolina. “The answer was, ‘We don’t have any.”’ Within four months, she landed a $50 million corporate account and became one of her division’s top 10 producers, she said.

The Hennessee Hedge Fund Index, which she also created at E.F. Hutton, tracked the performance of investment managers and was published in Barron’s.

Going Independent

Hennessee, along with the advisory business, moved from E.F. Hutton, where she was a vice president, to other corporate parents, including Shearson Lehman Brothers/American Express and Republic National Bank. In 1995, Gradante joined the operation and, two years later, the couple took it independent.

As a fund of funds, Hennessee Group managed as much as $1.6 billion and helped wealthy clients choose hedge funds, which are loosely regulated investment pools open only to high-net worth individuals. The firm published a monthly hedge fund review and had offices in New York, Raleigh and Palm Beach.

In 2007, the New York Post named Hennessee to its list of the city’s 50 most powerful women.

As a woman and a southerner -- she spoke with a drawl -- Hennessee stood out in Manhattan’s financial industry. In a 2011 Forbes profile, she recounted episodes of enduring course language and sexual innuendos, which she wouldn’t tolerate.

“You have the manners of a field hand,” she said to one offender, according to Forbes. She told a bullying male colleague: “I know you have a wife, niece, daughter. I hope when she is out there trying to make a living no one treats her as badly.”

Help Group

She was an early backer of 100 Women in Hedge Funds, a New York-based
organization focusing on educational events, professional networking and
philanthropy.

In 2005, Hennessee Group clients lost most of the more than $56 million they had invested in the hedge fund Bayou Management before it collapsed, according to the Securities and Exchange Commission. The advisory firm in 2009 paid a $100,000 fine and disgorged $549,000, plus interest, to settle regulatory claims filed by the SEC that it failed to perform adequate due diligence before steering clients to Bayou. The settlement didn’t include any admission or denial of the claims.

Hennessee Group’s advisory business was acquired by New York-based Terrapin Asset Management in 2013.

Elizabeth Lee Hennessee was born Sept. 1, 1952, in Raleigh, North Carolina, to Mary Frances Dillon and William E. Hennessee, according to her 1992 wedding announcement in the New York Times. Her father was an executive with Dillon Supply Co. The business, which supplied tools and industrial material, was owned by her grandfather and took up six city blocks, according to the Forbes profile.

Hennessee graduated from Randolph-Macon Woman’s College, today’s Randolph College, in Lynchburg, Virginia, in 1975.

Early Career

After a year working as a teacher, she got her start in the securities business in 1976 as a retail and institutional sales representative at Thomson McKinnon Securities in New York. She teamed with a more senior female colleague to run seminars on finance for women.

Hennessee served as a finance chair for the 1999 presidential campaign of Elizabeth Dole, a family friend from North Carolina. She also helped Billy Graham, another family acquaintance, organize his 2005 crusade in New York.

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