Asset manager founded by Crispin Odey suspends trading in fourth fund to prevent investors from pulling out after misconduct allegations
The asset manager founded by Crispin Odey has suspended trading in a fourth fund as it struggles to prevent investors from pulling out en masse following allegations of sexual misconduct.
In a letter to clients yesterday, Odey Asset Management said it has temporarily suspended trading in its Special Situations fund, which is worth around £62 million. The plan is to sell some of its assets to meet withdrawal requests in an “orderly manner”.
The company was reeling after a string of sexual allegations against Odey, 64, in the Financial Times earlier this month. He denies the allegations.
Earlier this week, in an effort to contain the fallout and an outflow of investor money, the company’s managers decided to halt trading in three other funds.
Brook Developed Markets, LF Odey Portfolio and Brook Absolute Return were all suspended. The group also closed its Odey Swan fund, which was managed by Odey himself and contained around £100 million in assets. The fund will now be liquidated and the proceeds returned to investors.
Battle: Odey Asset Management said it has temporarily suspended trading in its Special Situations fund, which is worth around £62m
The hedge fund forced Odey out last weekend. Earlier this week it said it was in “advanced talks” to split itself up and hand over money and staff to rivals in what could spell the end of the group, which was founded in 1991.
Several major banks — including JP Morgan, Goldman Sachs and UBS — have cut ties with the company as prime brokers and custodians. Prime brokers provide hedge funds loans and other services, while custodians protect clients’ funds.
The breakup of Odey Asset Management is expected to be investigated by the Financial Conduct Authority (FCA) and any foreign regulators that may have interests in foreign funds. His partners have already severed their ties with Odey, declaring on Saturday that he “will no longer have any economic or personal involvement in the partnership.”
But he reportedly still has £600m of his own money in five funds, which have been acquired by other investment managers and will be part of this switch to other funds.
Odey denies the allegations against him and says he has been the victim of an “aggressive campaign”. While he admitted to massaging a colleague’s back, he said it was “not a criminal offence.”
The scandal has also led to questions from MPs about whether the FCA was aware of the allegations against Odey.
Conservative MP Harriett Baldwin, chairman of the Treasury Select Committee, has written to FCA boss Nikhil Rathi to clarify what the regulator knew and whether it had taken any action against Odey or his asset manager following allegations of misconduct.