[1/3] Hedge fund supervisor Crispin Odey gestures as he departs Westminster Magistrates’ Court docket, after being discovered not responsible of indecent assault, throughout a three-day lengthy trial in London, Britain, March 11, 2021. REUTERS/John Sibley/File Picture
LONDON, June 15 (Reuters) – Odey Asset Administration is in superior talks to maneuver funds and workers to different asset managers because it grapples with the fallout of sexual misconduct allegations towards its founder Crispin Odey.
The Monetary Occasions and Tortoise Media reported that 13 ladies had alleged that Odey had sexually assaulted or harassed them over a 25-year interval.
Odey, certainly one of Britain’s best-known hedge fund managers, final week advised Reuters that the report was a “rehash of an outdated article and not one of the allegations have been stood up in a courtroom or an investigation”. A spokesperson for the hedge fund declined additional touch upon Thursday.
A number of main banks, which offered prime brokerage providers, have stated they might lower ties with Odey’s agency.
A letter signed by Odey Asset Administration’s (OAM) companions stated any sale or rehousing of funds was topic to regulatory approvals and due diligence, including that the boards and managers of the funds have been “supportive” of the plan.
“Performing in one of the best curiosity of our traders and our workers has continued to be our major concern over the previous few days. We are going to proceed to replace you,” the letter, which was seen by Reuters on Thursday, added.
Hedge funds similar to OAM depend on leverage from prime brokerage service suppliers to make their market bets. With no prime dealer, a hedge fund which must borrow shares can’t perform. OAM takes lengthy and brief positions in equities.
Goldman Sachs, Morgan Stanley and JP Morgan have already entered the method to wind down service agreements that they had with OAM, sources advised Reuters. This could take as much as 90 days, however the course of is commonly shorter, one supply added.
UBS, listed in public filings as certainly one of OAM’s prime brokers, has not had an lively relationship with the hedge fund “for a very long time” however has additionally determined to wind down its inactive relationship, one other supply advised Reuters.
The banks all declined to remark.
Britain’s Monetary Conduct Authority (FCA) declined to touch upon OAM’s strikes and on whether or not it could stay a going concern. A spokesperson for OAM additionally declined to touch upon whether or not the strikes signalled that the hedge fund would shut.
CULTURE CONCERNS
OAM ‘gated’, the trade time period used when a fund prevents withdrawals, its Brook Asset Administration fund managed by James Hanbury on June 12 and closed one other, a separate letter to traders seen by Reuters on June 13 exhibits.
The OAM board stated it took the choice to gate the Brook Developed Markets Fund after it confronted “redemption requests in extra of ten per cent of the web asset worth”.
Lawmakers on Britain’s Treasury Choose Committee wrote to the FCA on Wednesday to query the regulator’s supervision.
Its questions embrace whether or not the FCA scrutinised Odey’s transfer in November 2020 from a task requiring FCA approval of his private suitability, to at least one the place this was licensed by OAM.
The committee additionally requested the FCA how many individuals it has investigated for sexual harassment throughout the trade since December 2019, when it turned liable for supervising the conduct of senior managers.
The letter is more likely to spark elevated scrutiny of the watchdog’s dealing with of Odey, after it started an investigation into alleged misconduct by him in 2021.
“Tradition in monetary providers and the experiences of girls within the trade are ongoing issues of the Treasury Committee,” stated the letter, signed by committee chair Harriett Baldwin.
The committee has requested the FCA to reply to questions demanding granular particulars about its two-year investigation of OAM by July 5.
Reporting by Nell Mackenzie; Enhancing by Sinead Cruise, Dhara Ranasignhe and Alexander Smith
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