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

2/2
© Reuters. FILE PHOTO: Hedge fund supervisor Crispin Odey gestures as he departs Westminster Magistrates’ Courtroom, after being discovered not responsible of indecent assault, throughout a three-day lengthy trial in London, Britain, March 11, 2021. REUTERS/John Sibley/File Photograph

2/2

By Nell Mackenzie, Farouq Suleiman and Kirstin Ridley

LONDON (Reuters) -Odey Asset Administration is in superior talks to maneuver funds and employees to different asset managers because it grapples with the fallout of sexual misconduct allegations in opposition to its founder Crispin Odey.

The Monetary Instances 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 supplied prime brokerage providers, have mentioned they’d lower ties with Odey’s agency.

A letter signed by Odey Asset Administration’s (OAM) companions mentioned any sale or rehousing of funds was topic to regulatory approvals and due diligence, including that the boards and managers of the funds had been “supportive” of the plan.

“Appearing in the very best curiosity of our traders and our employees has continued to be our major concern over the previous few days. We’ll proceed to replace you,” the letter, which was seen by Reuters on Thursday, added.

Hedge funds comparable 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’t perform. OAM takes lengthy and brief positions in equities.

Goldman Sachs (NYSE:), Morgan Stanley (NYSE:) and JP Morgan have already entered the method to wind down service agreements that they had with OAM, sources instructed Reuters. This will take as much as 90 days, however the course of is commonly 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 will 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 trade 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 mentioned it took the choice to gate the Brook Developed Markets Fund after it confronted “redemption requests in extra of ten per cent of the web 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 at least one the place this was licensed by OAM.

The committee additionally requested the FCA how many individuals it has investigated for sexual harassment throughout the trade since December 2019, when it turned accountable for supervising the conduct of senior managers.

The letter is prone 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 trade are ongoing issues of the Treasury Committee,” mentioned the letter, signed by committee chair Harriett Baldwin.

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