Crispin Odey celebrates best year ever as European Inc fund soars 152%
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Crispin Odey celebrates best year ever when the value of one of his hedge funds more than doubles
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Crispin Odey has celebrated his best year ever after the value of one of his hedge funds more than doubled.
His European Inc fund rose 152 percent last year as Odey made money from bets against UK government bonds, which saw their value fall as rising inflation and market turmoil caused by Liz Truss’ mini-budget ravaged the economy.
The fund manager had built up a large bet against long-dated UK bonds, known as gilts, most of which mature in 2050 and 2061.
Bond bonanza: Crispin Odey’s European Inc fund rose 152% last year as he made money on bets against UK government bonds, which saw their value fall
His bets were backed by large amounts of loans and at one point were worth nearly 800 percent of the value of the hedge fund’s assets.
But as inflation soared in the UK and around the world, driving borrowing costs higher and bond prices lower, the bet quickly paid off, allowing the fund to make money.
The gains could have been even bigger, with an investor document showing the fund was up 193 percent before returning some gains in the last three months of the year, Bloomberg reported.
Odey also bet against the pound, which saw its value fall more than 10 percent against the dollar last year. The proceeds allowed the 64-year-old to effectively make up for the losses he suffered between 2015 and 2020.
While he has since reduced his short position on gilts, Odey has invested in long-dated UK bonds linked to inflation, which is expected to remain elevated.
He has also predicted that commodity prices will “rise again” amid ongoing disruption from the war in Ukraine and the reopening of China’s economy.
Odey has a long track record of making controversial but profitable bets that often run counter to conventional wisdom.
The fiery Brexiteer made about £220 million on the night of the UK’s vote to leave the bloc by betting that the markets would collapse.
He also cashed in last year after predicting that oil and gas prices would rise, a prediction that proved correct after Russia attacked Ukraine.
Founded in 1991, Odey Asset Management also has a stake in South African miner Thungela Resources, which despite its environmentally unfriendly activities was one of the best performing stocks in the London market last year and saw its share price rise by nearly $260. per cent.