Title: Odey Asset Management Considers Restrictions on Investor Withdrawals Amid Sexual Misconduct Allegations Against Founder
Odey Asset Management’s EU investment funds are discussing restrictions on investor withdrawals as a part of emergency measures to contain the fallout from sexual misconduct allegations against the hedge fund manager’s founder, Crispin Odey. The board of directors of Odey Asset Management on Saturday forced Odey to abandon the company after he was accused of sexual assault or harassment by 13 women. The allegations also prompted the Financial Conduct Authority (FCA) to expand an investigation into the wealth manager, and some of the firm’s major banks are cutting ties.
Management Changes to Stabilize the Business
To stabilize the business and increase its distance from Odey, the firm announced a series of management changes to the funds managed by him. Odey’s management of OEI and OEI MAC, the firm’s oldest strategies, and the funds on which the hedge fund manager built his reputation, will be taken over by Freddie Neave. James Hanbury will take over the fund management of the global equity strategy LF Odey Opus Fund, and Oliver Kelton will take over the management of the Odey Pan European Fund. The partnership is considering different options, including the closure proposal of the Odey Swan Fund, which in the meantime will continue to be managed by Neave, who co-managed it with Odey.
Restrictions on Investor Withdrawals
Two people familiar with the discussions stated that the boards that oversee its EU investment funds are exploring limits on redemptions or a measure called “gating” in case too many investors want their money back at once. The company is afraid that it could experience high outflows in the coming days. Odey Asset Management’s Ucits strategies include two Odey funds reallocated to new managers, the £100m Dublin-based fund Odey Swan fund, and the 20 million pounds Odey Pan-European Fund. The boards of directors of Ucits are independent from Odey Asset Management and their obligation is to the underlying shareholders of the funds. It has recently been invoked by some British property funds due to difficult market conditions.
Investigations and Closures
According to Odey Asset Management, he continued to be regulated by the FCA, with whom the company communicated regularly throughout the process. The FCA declined to comment on the matter. Investigations into the allegations made against Odey are ongoing. In the meantime, the firm may decide to place restrictions on other funds if necessary to protect investors. Odey Asset Management’s total assets under management (AUM) amount to about $4.4 billion.
The partnership is considering different options, including the closure proposal of the Odey Swan Fund. In the meantime, it will continue to be managed by Neave, who co-managed it with Odey. The company said that it plans to “announce a complete rebranding of the partnership in the near future.”
Additional Piece:
Sexual Misconduct in High Finance
The financial industry has been notorious for years for being male-dominated and toxic in terms of gender relations. Sexual harassment and misconduct are widespread in some parts of the industry, such as hedge funds and private equity, where women account for only a small percentage of the employees.
Several high-profile cases of sexual misconduct have surfaced in recent years, including those against former Pimco CEO Bill Gross, Blackstone’s Adam Levinson, and Apollo Global Management’s Leon Black. Each case has affected the reputation and financial stability of their firms, led to resignation or restructuring, and resulted in economic losses.
The #MeToo movement has shed a light on the issue of sexual harassment and abuse in the workplace, and some companies have taken steps to address the problem, such as implementing anti-harassment policies and training programs. However, more needs to be done to create a safe and equitable working environment for all employees, regardless of gender or background.
Transparency and Accountability
Companies in the financial industry need to create a culture of transparency and accountability that encourages employees to speak up about inappropriate behavior without fear of retaliation. They should also adopt stricter policies to prevent harassment and misconduct, including a code of conduct that prohibits inappropriate language or behavior, regular training for all employees, and a clear reporting process that allows victims and witnesses to come forward without fear of retaliation.
Diversity and Inclusion
Diversity and inclusion are critical to creating a more equitable and productive working environment in the financial industry. Companies should actively recruit and promote women, minorities, and individuals with diverse backgrounds and perspectives to increase the diversity of their workforce. They should also create affinity groups or employee resource groups to promote networking, mentoring, and professional development opportunities for underrepresented groups.
Conclusion
The sexual misconduct allegations against Crispin Odey and their impact on Odey Asset Management underscore the urgent need for the financial industry to address the problem of sexual harassment and abuse. Companies must take proactive steps to create a safe, equitable, and inclusive working environment that promotes transparency, accountability, diversity, and inclusion. Failing to do so puts their reputation and economic stability at risk, as well as the well-being of their employees.
Summary:
Odey Asset Management is considering restrictions on investor withdrawals amid the fallout from the sexual misconduct allegations against its founder, Crispin Odey, who has been accused of sexual assault or harassment by 13 women. Odey was forced to abandon the company after the allegations surfaced, and the Financial Conduct Authority (FCA) has expanded its investigation into the wealth manager. Management changes have been made to stabilize the business and keep the company at a distance from Odey, and the firm is exploring gating to prevent high outflows. The company’s Ucits strategies include two funds that have been reallocated to new managers, and the boards of directors of Ucits funds are independent and exploring redemptions.
The financial industry has been notorious for sexual harassment and misconduct. Companies in the financial industry need to create a culture of transparency and accountability, adopt stricter policies, and actively recruit diverse talent.
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EU funds managed by Odey Asset Management are discussing restrictions on investor withdrawals as part of emergency measures to contain the fallout from sexual misconduct allegations against the hedge fund manager’s founder.
It comes as the firm announced a series of management changes to funds managed by Crispin Odey ahead of Monday’s market open. The company is looking to stabilize the business and further distance the company from the financier following his ouster.
The board of directors of Odey Asset Management on Saturday forced to abandon Odey after the Financial Times reported he was accused of sexual assault or harassment by 13 women. The allegations have also prompted the Financial Conduct Authority, the UK’s watchdog, to expand an investigation into the wealth manager and some of the firm’s major banks to cut ties.
Restrictions on investor withdrawals are being considered amid fears the company could experience high outflows in the coming days, according to two people familiar with the discussions. The boards that oversee its EU investment funds (known as UCITs) are exploring limits on redemptions – a measure called “gating” – in case too many investors want their money back at once, they said.
In a statement to clients Sunday evening, Odey Asset Management said that Odey’s management of OEI and OEI MAC – the firm’s oldest strategies and those on which the hedge fund manager built his reputation – would be taken over by Freddie Neave.
Fund management of the global equity strategy LF Odey Opus Fund will be taken over by James Hanbury. Oliver Kelton will take over the management of the Odey Pan European Fund.
Regarding the Odey Swan Fund, the partnership is considering options to propose to the fund’s board, which could include its closure. In the meantime, it will continue to be managed by Neave, who co-managed it with Odey.
The company added that it plans to “announce a complete rebranding of the partnership in the near future.”
Odey Asset Management said it continued to be regulated by the FCA, with whom it “communicated regularly. . . throughout this process.” He added that he was “in constructive dialogue over the weekend with our major counterparties, including prime brokers.”
Odey Asset Management’s Ucits strategies include two of Odey funds reallocated to new managers, £100m Dublin-based fund Odey Swan fund and the 20 million pounds Odey Pan-European Fund. The funds could not immediately comment on any restrictive measures.
The boards of directors of Ucits are independent from Odey Asset Management and their obligation is to the underlying shareholders of the funds. Gating is a common response to destabilizing ransom demands. It has recently been invoked by some British property funds due to difficult market conditions.
Odey Asset Management has a total of about $4.4 billion in assets under management and may also decide to place restrictions on other funds if necessary to protect investors, the people said. Odey Asset Management declined to comment.
The FCA declined to comment. One person familiar with the situation said that gating was generally a matter of the funds themselves, not their regulator.
On Thursday, Morgan Stanley, one of Odey Asset Management’s major lead brokers, moved to cut ties with the firm. Sunday declined to comment on whether he would revisit that decision given subsequent changes within the company. Prime brokers are key to hedge funds because they offer leverage, manage their trades and allow them to hedge risk.
JPMorgan, another of Odey’s key banking relationships, continues to “review” the situation, said a person familiar with the bank’s position. “We have to consider . . .[Saturday’s]new information so that it is part of our review,” the person said. “The fact that we have prime [broking] and custody when other banks don’t mean we have more to consider.
Peter Martin, chief executive officer of Odey Asset Management, and Michael Ede, chief financial and operating officer, said on Saturday that Odey “will no longer have any financial or personal involvement in the partnership.”
Hate step back as co-CEO of the firm in November 2020, four months after he was accused of indecently assaulting a young bank employee. He has been found not guilty the following March. The FT reported Thursday that 13 women alleged Odey had sexually assaulted or harassed them in various incidents over a 25-year period.
In a separate statement on Saturday, Odey Asset Management said it had “investigated the allegations regarding Mr. Odey,” without elaborating.
A law firm representing Odey previously said the charges brought against him had been “strenuously contested”. Odey said last week that “none of the allegations have been sustained in a courtroom or in an investigation.”
https://www.ft.com/content/9aded128-5fc6-4d17-adbd-ad12ee2b0292
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