Haugerud approached Cargill's hedge fund, Black River Asset Management LLC, run by former boss Gary Jarrett. Cargill invested $60 million, and Black River took a 49% stake in 2003.
"The minute Cargill said they'd invested in me, ka-ching, ka-ching, and the money started pouring in," she says. When Black River offered to buy the rest, Haugerud and investors instead bought back Black River's stake.
"She's very entrepreneurial and didn't want to work in a corporate environment," Jarrett says.
Galtere's assets soared to $2.4 billion before Haugerud suffered through three down years. The flagship fund fell 1.7% in 2008 and 0.1% in 2009. In 2011, her wager on resource-rich nations backfired. In one instance, Haugerud bought the Brazilian real and Mexican peso and sold the dollar, calculating that those nations would grow faster than the U.S. Instead, Greek debt buffeted Europe, the dollar rose and commodities fell.
"We got the big picture wrong," Haugerud says.
Her strategy to manage risk forced her to close trades after 2% losses.
"Even though I traded for 30 years, it depressed me," she says.
Haugerud's second fund, Galtere Ultra, convinced her to keep going. Ultra makes the same bets as the flagship but tolerates more risks. As of the end of July, the fund was up 43% since its inception in October 2008.
"There's a science of trading and an art of trading," she says. "The science of trading ponders the past; the art of trading focuses on the future. In a good hedge fund, you need both."
That's the message Haugerud wants to instill at the University of Tennessee at Chattanooga's College of Business. She and her husband, John Murphy, a retired Axa SA executive and university alumnus, have a home in the city and donated $2 million to the school. Of that sum, $1.5 million went to start the Galtere Institute, which aims to imbue finance with a female perspective via courses such as the neuroscience of trading.