Odey Asset Management has suspended trading in a fourth fund following a “sizeable level” of withdrawal requests in the wake of sexual misconduct allegations against founder Crispin Odey, which have precipitated the break-up of one of London’s oldest hedge fund firms.
The firm said in a letter to investors on Friday that it was temporarily suspending trading in its $80mn Special Situations fund to sell assets in an “orderly fashion” to meet the redemptions.
Meanwhile, Crispin Odey resigned on Thursday as a director of ICP Holdings, a group of companies operating in the Lloyd’s of London insurance market.
The moves cap a tumultuous week for both the firm and its founder since the Financial Times published last Thursday an investigation into allegations of sexual assault or harassment from 13 women against Crispin Odey. He strenuously denies the allegations.
The firm said on Thursday it was in “advanced discussions” about transferring certain funds and staff to rival companies.
Odey Asset Management earlier this week halted trading in three other funds — Brook Developed Markets, LF Odey Portfolio and Brook Absolute Return — and closed the Odey Swan fund, because of the higher than usual volume of withdrawal requests.
The Swan fund, which was managed by Crispin Odey and houses €117mn of assets, is being liquidated so that money can be returned to shareholders. The measure to halt withdrawals from the other funds is one of the emergency actions taken by the firm to mitigate the effects of investors and institutions cutting ties with Odey Asset Management.
This week, the FT reported that JPMorgan was terminating its relationship with the asset manager, serving notice on its prime broking and custody relations. Prime brokers provide hedge funds with stock lending, lending and other services, while custodians safeguard customers’ money. It is a regulatory requirement for hedge funds to have a custodian in place.
UBS also moved to cut ties with Odey Asset Management as a prime broker, following Morgan Stanley, Exane, JPMorgan and Goldman Sachs.
Odey Asset Management, which oversees about $4.4bn, is now in talks with rivals about offloading funds and managers in a move that could spell the end of the firm that Crispin Odey founded in 1991.
The firm said on Thursday that “any sale or rehousing is considered subject of course to any relevant regulatory approvals and due diligence, with a view to an orderly transition of any assets and investors”. However, it did not name the companies engaged in the discussions.
The firm’s biggest funds include Brook European Focus Fund, run by Oliver Kelton, and LF Brook Absolute Return Fund, run by James Hanbury. Odey Asset Management created the Brook brand in 2020 and rebadged several funds with the moniker.
Crispin Odey’s departure from ICP Holdings is detailed in filings first reported by Bloomberg.
The group includes a corporate member, or insurer, at Lloyd’s, that had £104mn of underwriting capacity last year, according to company accounts.
Lloyd’s declined to comment on whether Crispin Odey is a participant in the market, but said “all members and participants at Lloyd’s are expected to meet the standards we set and action may be taken where those standards are not met”.
Odey Asset Management also has an 8 per cent holding in Aim-listed Helios Underwriting, which owns a portfolio of insurance entities within Lloyd’s. Helios declined to comment.
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