Odey’s Hedge Fund Empire Is Disintegrating Bit by Bit

Less than a month on from the latest sexual assault allegations against Crispin Odey, there is little left of the hedge fund empire it took him three decades to build, with all his fund managers in talks to move out.

(Bloomberg) — Less than a month on from the latest sexual assault allegations against Crispin Odey, there is little left of the hedge fund empire it took him three decades to build, with all his fund managers in talks to move out. 

Odey Asset Management, which has sacked Odey from its partnership, told clients Monday that it has found a new home for fund manager Adrian Courtenay. He follows James Hanbury, Oliver Kelton and Freddie Neave out the door.

Odey, 64, has denied the allegations made in a Financial Times report on June 8 about his treatment of women. Still, numerous banks have cut ties with his firm and investors have raced for the exits, forcing the company to shut two funds and suspend several others. 

Discussions to rehouse other funds and managers are ongoing, the firm said in the client letter on Monday seen by Bloomberg, pushing one of the UK’s oldest hedge fund managers to the brink of disintegration. 

A spokesman for Odey Asset Management declined to comment.

All fund managers at Odey and its subsidiary Brook Asset Management are in talks to leave. In the case of the OEI Mac fund managed by Neave, the firm has told investors it plans to rehouse most of the assets in a new vehicle, though the process may not include Odey’s personal investments.

Odey’s career has been punctuated by extreme performance highs and lows thanks to his notoriously contrarian bets that differentiated him from modern-day hedge fund managers, which are known for their focus on risk management and steady returns.  His monthly commentary was widely tracked for his market predictions, the most noteworthy of which — such as UK stocks could fall 80% after the Brexit vote — rarely came true.

“Odey’s business always seemed like a contradiction: a 1990s hedge fund gunslinger as the figurehead of a quasi-institutional 21st century asset manager,” said Andrew Beer, founder of Dynamic Beta Investments. “Unfortunately, the latter never escaped the former.”

Courtenay’s Special Situations fund was one example of this volatility, with a 24% gain in 2021 followed by a 13% loss last year. Odey said Monday it’s in talks with Green Ash Partners, a London-based asset manager that recently launched a fund managed by famed short seller Jim Chanos, to transfer the fund. 

Meanwhile, Courtenay is seeking to have the suspension lifted from this fund in order to allow clients to exit or invest into his strategy, a signal he’s confident that his fund will ultimately survive the current turmoil.  

The firm also has plans to rehouse Hanbury’s funds to Lancaster Investment Management and Kelton’s money pools to SW Mitchell Capital. One of Hanbury’s pools, the Brook Developed Markets Fund, will emerge from its suspension on July 7, Bloomberg News reported on Tuesday.  

For Odey, the sudden unraveling follows a stormy few years for the hedge fund manager. The flagship fund lost money in five of the six years through 2020 before surging 54% a year later and a record 152% last year to recover all losses. But many investors gave up before the rebound, and Odey’s assets never again approached the peak of more than $13 billion achieved in 2015.

The latest collapse was triggered by the publication of a Financial Times investigation into his treatment of women over a 25-year period that included claims by 13 women of sexual harassment or, in eight of those cases, assault. The accusations followed similar reports in the two years since he was acquitted of a sexual assault charge in a British court in 2021. 

Subsequently, two women came forward to Bloomberg, while another went to the Times of London newspaper. Additional accounts appeared in a Tortoise Media podcast.

“This industry has a duty to demonstrate to wider society that it has good judgement and will make the right decisions to protect the long-term future of the firm and those it works for,” said Bev Shah, founder of City Hive, an advocacy group in London that promotes diversity in the investment management industry. “Firms should see more clearly now than ever that they must act swiftly and comprehensively.”

(Updates with the lifting of Brook fund suspension in 11th paragraph.)

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