Now Crispin Odey firm halts trading in fourth fund

The asset manager founded by Crispin Odey has suspended trading in a fourth fund as it battles to prevent a rush of investor withdrawals following sexual misconduct allegations.

In a letter to clients yesterday, Odey Asset Management said it has temporarily suspended trading in its Special Situations fund, which is worth around £62m. The plan is to sell some of its assets to meet withdrawal requests in an ‘orderly fashion’.

The firm has been reeling after a string of sexual allegations against Odey, 64, were published in the Financial Times earlier this month. He denies the allegations.

In a bid to contain the fallout and an exodus of investor cash, the firm’s managers earlier this week decided to halt trading in three other funds. 

Brook Developed Markets, LF Odey Portfolio and Brook Absolute Return were all suspended. The group also shut its Odey Swan fund, which was managed by Odey himself and contained around £100m in assets. The fund is now being liquidated and its proceeds returned to investors.

The hedge fund forced Odey out last weekend. Earlier this week, it said it was in ‘advanced discussions’ to break itself up and transfer funds and staff to rivals in what could spell the end of the group, which was founded in 1991.

Several major banks – including JP Morgan, Goldman Sachs and UBS – have severed ties with the firm as prime brokers and custodians. Prime brokers provide hedge funds with lending and other services while custodians safeguard client money.

The break-up of Odey Asset Management is expected to be scrutinised by the Financial Conduct Authority (FCA) and any foreign regulators who may have an interest in overseas funds. Its partners have already broken their ties with Odey, stating on Saturday that he will ‘no longer have any economic or personal involvement in the partnership’.

But he is understood to still have £600m of his own money across five funds, which have been taken over by other investment managers and will be part of this move to other funds.

Denying the allegations against him, Odey says he has been a victim of an ‘aggressive campaign’. While he admitted to massaging a colleague’s back, he said this was ‘not a criminal offence’.

The scandal has also sparked questions from MPs about whether the FCA was aware of the allegations against Odey.

Conservative MP Harriett Baldwin, chairman of the Treasury Select Committee, has written to FCA boss Nikhil Rathi to clarify what the regulator was aware of and whether it had taken any action against Odey or his asset management firm following allegations of misconduct.