SHOCKING! Unveiling the Dark Secrets of Crispin Odey, British Hedge Fund Manager Accused of Harassment and Assault

(Bloomberg Opinion) — “I have the ability to stay in an uncomfortable place for an uncomfortable amount of time,” Crispin Odey said. Bloomberg last year. It was a reference to his investing style and his impressive recovery from years of successive losses. With the company that bears his name imploding days after he was fired amid allegations of sexual harassment and assault, that sentiment is about to be put to the test.

Odey’s three-decade career as one of London’s most famous and controversial hedge fund managers has come to a standstill. In the space of a week, he went from celebrating his best performance year to having to watch from the sidelines as the company he founded fell apart.

The dramatic drop ends a career marked by extreme ups and downs in performance. A known investor contrary (characterized by taking positions, long or short, against the thinking of the majority of the market), Odey, 64, made a name for himself as an extreme risk taker, producing spectacular gains, but also huge losses.

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Odey Asset Management, the company he created in 1991, had $13 billion in assets under management. The value had fallen to around $4.3 billion before recent allegations prompted investors to bail out their funds as contractors including Morgan Stanley and Goldman Sachs Group parted ways.

Odey’s reckoning was sparked by the publication of an investigation into the financial times on the treatment of women over the past 25 years, which includes multiple allegations of sexual harassment and assault. The women described rude comments, unwanted touching and rejected proposals to be their lovers, according to sources from the Bloomberg News. Thirteen women told the financial times about harassment or abuse, eight of whom claimed he sexually assaulted them.

The allegations followed similar reports in the two years since he was acquitted of a sexual assault charge in a British court in 2021. Bloomberganother looked for the newspaper Times, London Additional reports appeared on a podcast from turtle media.

Odey denies the accusations. She did not respond to multiple calls and text messages seeking comment for this story.

“The implosion of Odey Asset Management was a stark reminder to investors of how close attention should be paid to key man risk,” said Harald Berlinicke, chief investment officer at Berlin-based family office Max-Berlinicke-Erben. “Often this is conveniently ignored. Most of the time, the bill never arrives, but when it does, investors often wonder how much they will have to pay.”

empty suitcase

Odey was born in January 1959 in Yorkshire, northern England, to a Conservative MP and a mother who came from a prominent business family. He was educated at Harrow, an elite private school for boys, studied history and economics at Oxford University and later, at his grandfather’s insistence, joined the bar.

In 1983 he left law to work in the City of London, first with Framlington Fund Manager and then with Barings International. The decision angered her grandfather, according to Odey.

“My grandfather didn’t like the city and he wasn’t used to being upset, so he got irritated,” Odey told the outlet. evening standard in 2012. “He left me nothing in his will except an empty suitcase.”

His 1991 marriage to Nichola Pease launched him firmly into London’s financial elite. Pease, whose father was chairman of Yorkshire Bank and vice-chairman of Barclays, has had a stellar career in investment banking and asset management. They soon became a power couple in London financial circles. The couple divorced after the acquittal of the assault case in 2021.

“Having studied, known and watched Crispin Odey for over 20 years, I see him as an extremely bright and cerebral fund manager, with strong opinions based on good research and experience that are reflected in his track record,” Jacob said. Schmidt, who runs the investment consultancy Schmidt Research Partners. “Although he is often too eccentric for me and our investors.”

As his wealth grew, his wealth was last ranked on the world’s rich list. sunday time, in 2020, with 825 million pounds, its influence has also increased. Personally or through his company, Odey has donated at least £1.7m to UK political parties, most of it going to the Conservative Party and pro-Brexit campaigns, according to the Electoral Commission.

Unlike most hedge fund managers, who are notoriously low-key, Odey is frequently quoted in the press with comments that span markets and politics, especially in relation to his support for Brexit. He has become one of the biggest critics of central banks and is often critical of UK politicians.

His monthly comments to investors largely trace back to his market predictions, the most notable of which failed to materialize, and he suffered losses for years before a surprising turnaround at his flagship hedge fund that began in 2021.

In 2022, he had a better year at his hedge fund Odey European Inc., with returns of 152% driven mainly by his highly leveraged short bets on long-term UK government bonds, while inflation and turmoil politics shook the British economy.

“Crispin Odey, with his great personality, was without a doubt a formidable force in the world of hedge funds,” said Bruno Schneller, managing director of Switzerland-based INVICO Asset Management AG.

rapid deployment

A few hours after the report of the financial times, the company’s banking relationships were reviewed, and investors began making redemption requests. The company, in full crisis management mode, did the most dramatic thing possible to stop the bleeding: It severed all ties to its founder.

In letters to clients on weekends, the investment company emphasized that Odey has no further financial or personal involvement in the company, despite having previously, according to UK Companies House records, at least 75% two voting rights the company.

Although swift, Odey’s ouster on Saturday morning (10) did not come in time to prevent Morgan Stanley from jumping ship. JPMorgan Chase and Goldman had already begun to review their relationships with the hedge fund.

Goldman’s managing directors met with Odey’s senior team last week, according to a person familiar with the discussions, who asked not to be named. After the meetings, the bank ended its relationship with the company. JPMorgan is expected to follow suit.

Politicians on Wednesday sought answers from the UK’s financial regulator over supervision of the company. The Financial Conduct Authority has spent two years investigating Odey’s conduct, but the full scope of its investigation has yet to be revealed.

Less than 24 hours later, the company was preparing for the endgame. “We have been and continue to be in a constructive dialogue with our service providers and key counterparties,” Odey Asset Management said in a letter to investors seen by the Bloomberg News. “However, it has become clear that some of the Company’s investment management activities are affected by recent events.”

The investment firm said it was in advanced talks with other asset managers to find a new home for its funds and some of its employees.

On Odey’s part, the fallout was spilling over to his other businesses. On the same day, he resigned as a director of three companies behind Insurance Capital Partners, a provider of underwriting funds in the insurance market for Lloyd’s of London.

Located on a quiet street in the London Borough of Mayfair, Odey’s offices are adjacent to other investment firms and luxury private residences, and just a three-minute walk from Hyde Park. Le Gavroche, the two-Michelin-starred restaurant where Odey is said to often have lunch, is across the street.

Earlier this week, passersby stopped briefly to look at the gold plaque on the office door and ponder why the journalists were outside. On Thursday afternoon (15), there were fewer spectators. Instead, there was a lot of coming and going from senior fund managers, including Mathieu Rachmaninoff, who politely declined to speak to Bloombergand Oliver Kelton, both entering the building with the head of IT.

Odey has not been seen in the office for several days, according to a doorman who works at a nearby private home, who asked not to be named.

“Hedge funds have spent a decade proving to the world that they can build enduring, diversified businesses,” said Andrew Beer, founder of Dynamic Beta Investments. “Odey will present himself as the counterpoint.”

©2023 Bloomberg L.P.

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