EU funds managed by Odey Asset Administration are discussing restrictions on buyers’ withdrawals as a part of emergency measures to include the fallout of sexual misconduct allegations towards the hedge fund supervisor’s founder.
It comes because the agency introduced a collection of administration modifications to funds run by Crispin Odey forward of the market opening on Monday. The corporate is looking for to stabilise the enterprise and put additional distance between the agency and the financier following his ousting.
Odey Asset Administration’s board on Saturday forced out Odey after the Monetary Occasions reported that he was going through allegations of sexual assault or harassment from 13 girls. The allegations have additionally prompted the Monetary Conduct Authority, the UK watchdog, to broaden a probe into the asset supervisor, and among the agency’s key banks to chop ties.
The restrictions on investor withdrawals are into consideration due to fears that the agency could undergo excessive outflows within the coming days, in line with two individuals with data of the discussions. The boards overseeing its EU funding funds (often called Ucits) are exploring curbs on redemptions — a measure known as “gating” — in case too many buyers need their money again directly, they mentioned.
In an announcement to shoppers on Sunday night time, Odey Asset Administration mentioned that administration of Odey’s OEI and OEI MAC — the agency’s oldest methods and those upon which the hedge fund supervisor constructed his renown — could be taken over by Freddie Neave.
Fund administration of the worldwide fairness technique LF Odey Opus Fund might be taken over by James Hanbury. Oliver Kelton will take over administration of the Odey Pan European Fund.
Concerning the Odey Swan Fund, the partnership is contemplating choices to place to the fund’s board, which can embody its closure. Within the meantime, it should proceed to be run by Neave, who co-managed it with Odey.
The corporate added that it deliberate to “announce an entire rebrand of the partnership within the close to future”.
Odey Asset Administration mentioned it continued to be regulated by the FCA, with which it has “been in common communication . . . all through this course of”. It added that it had been “in constructive dialogue over the weekend with our key counterparties, together with the prime brokers”.
Odey Asset Administration’s Ucits methods embody two of the Odey funds reallocated to new managers, the £100mn Dublin-based Odey Swan Fund and the £20mn Odey pan-European Fund. The funds couldn’t instantly touch upon doable restrictive measures.
The Ucits boards are impartial from Odey Asset Administration and their obligation is to the funds’ underlying shareholders. Gating is a standard response to destabilising redemption calls for. It has not too long ago been invoked by some UK property funds due to robust market situations.
Odey Asset Administration has about $4.4bn of property underneath administration in complete and will additionally determine to impose restrictions on different funds if crucial to guard buyers, the individuals mentioned. Odey Asset Administration declined to remark.
The FCA declined to remark. An individual conversant in the state of affairs mentioned gating was typically a matter for the funds themselves, not their regulator.
On Thursday, Morgan Stanley, considered one of Odey Asset Administration’s greatest prime brokers, moved to chop ties with the enterprise. It declined to touch upon Sunday whether or not it will revisit that call given the following modifications throughout the agency. Prime brokers are essential for hedge funds as a result of they provide leverage, handle their trades and permit them to hedge their threat.
JPMorgan, one other of Odey’s key banking relationships, continues to “assessment” the state of affairs, mentioned an individual conversant in the financial institution’s place. “Now we have to contemplate . . . [Saturday’s] new information in order that might be a part of our assessment,” the individual mentioned. “The truth that we now have prime [broking] and custody when different banks don’t means we now have extra to contemplate.”
Peter Martin, Odey Asset Administration’s chief government, and Michael Ede, chief monetary and working officer, mentioned on Saturday that Odey would “not have any financial or private involvement within the partnership”.
Odey stepped back because the agency’s co-chief government in November 2020, 4 months after he was charged with indecent assault of a junior financial institution worker. He was discovered not guilty the next March. The FT reported on Thursday that 13 girls alleged that Odey had sexually assaulted or harassed them in numerous incidents over a 25-year interval.
In a separate assertion on Saturday, Odey Asset Administration mentioned it had “been investigating allegations regarding Mr Odey,” with out elaborating.
A legislation agency representing Odey beforehand mentioned allegations made towards him had been “strenuously disputed”. Odey mentioned final week that “not one of the allegations have been stood up in a courtroom or an investigation”.
