Odey Asset Management has suspended trading in a fourth fund after allegations of sexual misconduct against founder Crispin Odey led to the breakup of one of London’s oldest hedge fund firms.
In a letter to investors on Friday, the company said it would temporarily halt trading in its $80 million special situation fund to sell assets in an “orderly manner” to meet redemptions.
The suspension is the company’s latest move to contain the fallout, as investors attempted to withdraw money from its funds over the past week. Odey Asset Management said on Thursday it was in “advanced discussions” about transferring certain funds and staff to rival firms.
The decision caps a tumultuous week for Crispin Odey since the Financial Times published on Thursday an investigation into allegations of sexual assault or harassment against Crispin Odey by 13 women. He strenuously denies the allegations.
Odey Asset Management halted trading in three other funds earlier this week – Brook Developed Markets, LF Odey Portfolio and Brook Absolute Return – and closed the Odey Swan fund due to a higher-than-usual number of withdrawal requests.
The Swan Fund, which is managed by Crispin Odey and has assets of 117 million euros, is being liquidated to return funds to shareholders. The move to halt withdrawals from other funds is one of the company’s urgent actions to mitigate the impact of investors and institutions cutting ties with Odey Asset Management.
This week, the Financial Times reported that JPMorgan was terminating its relationship with the asset manager and serving notices over its prime brokerage and custody relationship. Prime brokers provide stock borrowing, loans and other services to hedge funds, while custodians protect client funds. Regulation requires hedge funds to set up custodians.
UBS also began cutting ties with Odey Asset Management as a prime broker, following JPMorgan and Goldman Sachs.
Odey Asset Management, which manages about $4.4 billion in assets, is currently in talks with rivals to sell funds and managers, a move that could spell the end of the company Crispin Odey founded in 1991.
“Any sale or relocation will of course be subject to any relevant regulatory approvals and due diligence with a view to an orderly transition of any assets and investors,” the company said on Thursday. However, it did not name the companies involved in the discussions.
The firm’s largest funds include the Brook European Focus Fund, managed by Oliver Kelton, and the LF Brook Absolute Return Fund, managed by James Hanbury. Odey Asset Management created the Brook brand in 2020 and has relabeled several funds under that name.