June 15 (Reuters) – Odey Asset Administration (OAM) is preventing for survival after a media report alleging sexual misconduct by its founder Crispin Odey, one in all Britain’s best-known hedge fund managers, prompted its banks and traders sever ties with the agency.
OAM stated in a letter dated Thursday, and seen by Reuters, that it’s in “superior discussions” to maneuver funds and workers to different asset managers. The asset supervisor had already imposed exit curbs on key funds earlier within the week.
The Monetary Instances and Tortoise, in a joint publication on June 8, reported allegations by 13 ladies that Odey had sexually assaulted or harassed them over a 25-year interval.
Odey instructed Reuters final week that the report was a “rehash of an outdated article and not one of the allegations have been stood up in a courtroom or an investigation”.
Listed here are some key details about Odey, London-based OAM, the allegations, and their fallout:
WHO ARE CRISPIN ODEY AND ODEY ASSET MANAGEMENT?
Odey, 64, based the asset administration agency which bears his title in 1991.
OAM is thought for extremely leveraged bets on world equities, debt, currencies and commodities. In addition to OAM, the group additionally runs Brook Asset Administration and Odey Wealth.
Former British Chancellor Kwasi Kwarteng was as soon as an adviser to OAM.
Crispin Odey was a number one backer of Brexit and a donor to Britain’s ruling Conservative Get together.
WHAT IS ODEY BEST KNOWN FOR?
Odey rose to prominence throughout the 2008 monetary disaster when he made a fortune short-selling financial institution shares, a apply that includes betting on a decline within the worth of a inventory.
HOW BIG IS ODEY ASSET MANAGEMENT?
The agency had $4.8 billion in belongings beneath administration, in accordance with paperwork filed with the Securities and Change Fee in September 2022.
HOW HAS ODEY’S FIRM PERFORMED?
OAM is thought for its unstable efficiency. Its flagship Odey European fund, is down roughly 8% this yr, after it returned round 151% in 2022, its finest yr ever, because it shorted UK authorities bonds whereas shopping for inflation linked bonds.
HOW HAS THE UK’S REGULATOR RESPONDED?
Individually, British regulator the Monetary Conduct Authority (FCA) has been investigating the corporate since 2021, a supply accustomed to the state of affairs instructed Reuters.
Lawmakers on Britain’s Treasury Choose Committee wrote to the FCA on Wednesday to query its supervision. The letter, which the committee has requested it to reply by July 5, is more likely to spark elevated scrutiny of the FCA’s dealing with of Odey
The FT/Tortoise report stated Odey fired his government committee in 2021 after he was given a written warning on learn how to talk with feminine workers. OAM declined to remark.
The fund supervisor was cleared of indecent assault expenses by a British court docket in 2021.
WHAT HAVE BEEN THE REPERCUSSIONS FOR OAM?
Odey Asset Administration’s prime brokers, together with Goldman Sachs (GS.N), JPMorgan (JPM.N) and Morgan Stanley (MS.N) and UBS (UBSG.S) have been chopping their ties with the agency.
Prime brokers are important for a hedge fund as they supply buying and selling companies, leverage for bets and securities custody.
Schroders and Canada Life final week moved to chop again their dealings with asset administration companies with hyperlinks to Odey.
HOW HAS OAM RESPONDED?
OAM “doesn’t acknowledge the image of the agency that has been painted” by allegations of sexual misconduct by Odey printed by media, it instructed traders in a letter dated June 8.
Inside days, OAM was distancing itself from Odey and on June 10 the agency’s government committee stated he could be leaving.
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 reveals.
By Thursday, the agency was in discussions to maneuver funds and workers after consumer withdrawals surged, prompting some restriction on additional exits.
CAN OAM SURVIVE WITHOUT ODEY?
It’s wanting more and more unlikely, although bigger funds resembling Odey Asset Administration Group are made up of many funds with totally different buying and selling methods.
Brook Asset Administration and Odey Wealth, each a part of the Odey Group, are run by totally different portfolio managers resembling Hanbury and Peter Martin, the chief government of OAM.
The Odey European Inc fund was solely overseen by Odey and a majority of the 151 million euros ($162 million) it had beneath administration was his personal invested cash, stated two individuals accustomed to the matter.
($1 = 0.9305 euros)
Reporting by Carolina Mandl in New York and Nell Mackenzie in London; Enhancing by Elisa Martinuzzi, Dhara Ranasinghe and Alexander Smith
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