Odey partners block investor withdrawals as hedge fund flails

Odey Asset Management has blocked withdrawals from two funds and shut down another as the hedge fund flails after its founder faced accusations of sexual misconduct.

Partners at the firm ousted Crispin Odey over the weekend and said the business would be rebranded as it battles to reassure investors.

But as investors rushed to withdraw their money, the company gated the Brook Developed Markets Fund and the LF Brook Afternoon fund.

The two funds are run by Odey subsidiary Brook Asset Management. In a letter to customers, the Brook Developed Markets Fund – which had £452million in assets at the end of May – said it was forced to block withdrawals as investors sought to pull out cash worth over 10 per cent of the fund’s value.

The Swan Fund was also suspended, and its portfolio will soon be liquidated, the company told investors. 

In a letter to Swan Fund investors, the firm said it was ‘in the best interests of shareholders that the [fund] be closed and its portfolio liquidated, with the proceeds of liquidation being returned to shareholders’.

US bank JP Morgan also terminated its relationship with the asset management firm, meaning all big banks – including Morgan Stanley, Goldman Sachs and Exane – have cut ties with Odey Asset Management. 

A report published in the Financial Times last week revealed allegations of sexual harassment against 13 women over a 25-year period, causing Odey Asset Management to throw out the 64-year-old.

A law firm for Odey has said he ‘strenuously disputed’ the allegations. 

City watchdog the Financial Conduct Authority has launched an investigation into the possibility of ‘non-financial misconduct’ at the hedge fund two years ago.