Since the damning Financial Times story on hedge fund manager Crispin Odey on June 8, the fallout has been dramatic.
We’ve covered some of the main developments here and the regulatory implications here. We've also analysed the flows since the story broke here - and £277 million seems to have been withdrawn, according to Morningstar data.
The latest funds to be suspended are Odey European Inc and OEI Mac, which are domiciled in the Cayman Islands and launched in 1992 and 1994 respectively.
You can see below the current status of the funds managed by Odey Asset Management, the firm that bears the name of its founder.
On June 17th, the regulator placed restrictions on money movements in and out of the company. "The firm must not, other than in the ordinary course of business, or without the prior written consent of the Authority, in any way dispose of, withdraw, transfer, deal with or diminish the value of any of its own assets," the Financial Conduct Authority said on its register.
As we saw during the Woodford debacle, a crisis often triggers redemption requests, leaving the fund firm with a number of choices: watch the money disappear out of the door, which involves selling assets to meet orders, or to gate the fund to stem the outflows?
Another option is to wind the fund up altogether. In this specific case, all three options have appear to have been chosen; the Odey Swan fund is to be closed, while two under the "Brook" designation have been gated, which means investors are unable to sell or buy units in the fund. Odey Special Situations and Odey Portfolio gated on Friday. So by Friday close of business, four funds were gated, one closed and the rest open.
(Looking back to 2019, in Woodford Investment Management's case, the main Equity Income fund was wound up, the smaller Income Focus was sold to Aberdeen Standard, while Patient Capital was picked up by Schroders.)
Odey Asset Management released a statement on Thursday discussing "rehousing" funds to other asset managers, a move that could lead to the company being broken up.
Based on the publicly available information, we’ve looked at the 14 funds in the Morningstar database. The fund sizes in most cases are accurate to 31 May unless otherwise stated, as companies report flow data to us monthly. We've narrowed our focus down to UCITS funds and excluded funds such as Odey European Inc and OEI Mac, which are domiciled in the Cayman Islands.
Readers should bear in mind that, due to the evolving nature of this story, the status in the table above is subject to change.
Background
Crispin Odey has now left Odey Asset Management, and the firm is planning to change its name to defuse some of the fallout. This continues a process already underway.
A number of funds were rebranded from Odey to Brook in 2020, the year Crispin Odey was first charged by the Crown Prosecution Service; he was found not guilty in March 2021, and strenuously denies all subsequent allegations against him.
All of the Brook funds are managed by managers other than Odey and some of the funds still badged as "Odey" are being managed by different managers.
Odey Investments plc, which is registered in Ireland, is the umbrella firm managing the majority of the Odey AM funds. Brook Asset Management is a subsidiary of Odey Asset Management and manages the Brook funds. In a statement on 11 June, Odey Asset Management (or "the Partnership", which was part of the wider Odey Group) effectively divorced itself from Crispin Odey.
"By also removing Odey Asset Management Group from the Partnership, the firm removed all of Mr Odey’s economic and personal involvement. This means that the Partnership is now entirely unconnected to the Odey Group, which continues to be majority owned by Mr Odey," Odey Asset Management said in a statement on 11 June. On that date, Odey Asset Management said all funds apart from Odey Swan would "trade as normal".
But a statement put out on 15 June said: "Firstly, we have been, and remain in constructive dialogue with, our service providers and key counterparties. It has, however, become clear that some investment management activities of the Partnership are affected by recent events".
"The firm 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 clients."
Morningstar has contacted Odey AM to confirm the current status of the funds
