Odey Asset Management plans funds, staff moves in fight for survival

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 in opposition to its founder Crispin Odey.

The Monetary Occasions and Tortoise Media reported that 13 girls had alleged that Odey had sexually assaulted or harassed them over a 25-year interval.

Odey, one among Britain’s best-known hedge fund managers, final week instructed Reuters that the report was a “rehash of an previous 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 minimize 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 the most effective curiosity of our traders and our workers has continued to be our main 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 corresponding to OAM depend on leverage from prime brokerage service suppliers to make their market bets. And not using a prime dealer, a hedge fund which must borrow shares can not perform. OAM takes lengthy and quick positions in equities.

Goldman Sachs, Morgan Stanley and JP Morgan have already entered the method to wind down service agreements they’d with OAM, sources instructed Reuters. This will take as much as 90 days, however the course of is usually shorter, one supply added.

UBS, listed in public filings as one among OAM’s prime brokers, has not had an energetic relationship with the hedge fund “for a very long time” however has additionally determined to wind down its inactive relationship, one other supply instructed 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 business 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 online 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 1 the place this was licensed by OAM.

The committee additionally requested the FCA how many individuals it has investigated for sexual harassment throughout the business since December 2019, when it grew to become accountable 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 ladies within the business are ongoing issues of the Treasury Committee,” stated the letter, signed by committee chair Harriett Baldwin.

The committee has requested the FCA to answer questions demanding granular particulars about its two-year investigation of OAM by July 5.

Reporting by Nell Mackenzie; Modifying by Sinead Cruise, Dhara Ranasignhe and Alexander Smith

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