June 15 (Reuters) – Odey Asset Administration (OAM) is combating for survival after a media report alleging sexual misconduct by its founder Crispin Odey, one among Britain’s best-known hedge fund managers, prompted its banks and buyers 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 employees to different asset managers. The asset supervisor had already imposed exit curbs on key funds earlier within the week.
The Monetary Occasions and Tortoise, in a joint publication on June 8, reported allegations by 13 girls 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Odey instructed Reuters final week that the report was a “rehash of an outdated article and not one of the allegations have been stood up in a courtroom or an investigation”.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 info 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 identify in 1991.
OAM is understood 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 Social gathering.
WHAT IS ODEY BEST KNOWN FOR?
Odey rose to prominence in the course of the 2008 monetary disaster when he made a fortune short-selling financial institution shares, a apply that includes betting on a decline within the value of a inventory.
HOW BIG IS ODEY ASSET MANAGEMENT?
The agency had $4.8 billion in belongings underneath administration, in keeping with paperwork filed with the Securities and Change Fee in September 2022.
HOW HAS ODEY’S FIRM PERFORMED?
OAM is understood for its risky 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 scenario 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 how one can talk with feminine employees. OAM declined to remark.
The fund supervisor was cleared of indecent assault costs by a British courtroom 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 reducing their ties with the agency.
Prime brokers are very 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 buyers 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 can 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 buyers seen by Reuters on June 13 exhibits.
By Thursday, the agency was in discussions to maneuver funds and employees after shopper withdrawals surged, prompting some restriction on additional exits.
CAN OAM SURVIVE WITHOUT ODEY?
It’s trying more and more unlikely, regardless that bigger funds comparable to 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 comparable to 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 underneath administration was his personal invested cash, stated two folks accustomed to the matter.
($1 = 0.9305 euros)
Reporting by Carolina Mandl in New York and Nell Mackenzie in London; Modifying by Elisa Martinuzzi, Dhara Ranasinghe and Alexander Smith
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