Odey Asset Management is being dismantled, with the embattled hedge fund firm saying it is in “advanced discussions” to transfer certain of its funds and staff to rival firms in the wake of sexual misconduct allegations against its founder.
The firm has struggled to contain a spiralling crisis after a Financial Times investigation last week reported allegations of sexual assault or harassment from 13 women against its founder Crispin Odey.
The move to break up the company, which comes one week after the FT published its investigation, could mark the end of one of London’s oldest hedge fund firms. It will come as a further blow to Crispin Odey, who established the Mayfair-based firm in 1991 but was ousted from it last weekend in response to the allegations about his behaviour. He strenuously denies the claims.
“His fall from grace has come at last,” said one of the women who spoke to the FT as part of its investigation. “I really hope it will jolt others into ensuring their workplaces are safe ones where women can thrive.”
Odey’s removal from his eponymous firm was part of a sharp and swift fallout. The UK’s financial regulator is investigating the firm, which has itself triggered parliamentary scrutiny. Meanwhile, redemptions at several of Odey Asset Management’s funds were restricted this week after key banking partners, including Goldman Sachs and Morgan Stanley, cut ties with the group.
The firm fell into particularly dangerous territory when JPMorgan served notice on its agreement to safeguard assets for the hedge fund’s clients as its custodian. Financial Conduct Authority rules dictate that as the outgoing custodian, JPMorgan must find a substitute to take over its role. This could be challenging given other financial institutions have moved quickly to end their relationship with the crisis-hit group.
The firm said in a statement to clients on Thursday that it is “now in advanced discussions for rehousing funds and transferring certain fund management activities and individuals to other asset managers”.
“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.”
It did not provide any further detail. A person familiar with the process said regulators were being kept fully informed.
The firm added that while it had been in “constructive dialogue” with its service providers, it had entered into discussions to break up the firm as “it has however become clear that some investment management activities of the partnership are affected by recent events”.
The FCA declined to comment on the proposed transactions.
Additional reporting by Laura Noonan and Emma Dunkley in London