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UK’s premier asset management firm against the ropes over sexual misconduct case

Odey AM is on the verge of collapse and the regulator has limited its access to assets and cash due to harassment accusations against founder Crispin Odey

Crispin Odey
Fund manager Crispin Odey on his way to a courthouse in London.JOHN SIBLEY (REUTERS)
Miguel Moreno Mendieta

The future of Odey Asset Management is up in the air. The publication by the Financial Times of a series of allegations of sexual misconduct within the company has put its founder, Crispin Odey, the U.K.’s most famous investor, up against the ropes. The scandal has triggered a flood of withdrawal requests from clients, which has forced the British markets regulator, the FSA, to establish a series of curbs on the firm’s access to assets and cash.

The company, which has about €4 billion under management, is being dismantled after failing to contain the reputational crisis. The investigation points out that there are at least 13 women who claim to have suffered sexual harassment or abuse by Crispin Odey. The asset management company is in “advanced negotiations” to be taken over by another entity, which would also retain its employees.

Since the case broke two weeks ago, several firms have announced that they were ending all business ties with Odey AM. The latest has been JPMorgan, which severed a prime brokerage and custody arrangement with the company. Other major firms to have turned their backs on Odey AM include Morgan Stanley, Goldman Sachs and Exane. With the loss of these relationships, Odey AM’s market access is becoming more and more complicated, making it very difficult for the funds to operate.

A week ago, the company tried to create a firewall around its founder, announcing that he had been removed from all his positions and that he no longer held any shares in the company. But his name is still linked to the brand, which has made it impossible to contain the scandal.

Crispin Odey became very popular in 2016, when he made a lot of money betting on a “yes” to Brexit. On a dark day in the history of financial markets, the British investor struck gold by betting a good part of the €10 billion he managed that the British would vote in favor of leaving the European Union.

Odey, who was a donor to the Conservative Party and a fervent supporter of Brexit, had taken short positions on the pound sterling, so the sharp depreciation it suffered on that day brought him a lot of profits. He was also right when he predicted before anyone else that inflation would soar worldwide and central banks would have to raise interest rates.

Despite these resounding successes, the long-term performance of the funds he handled was not good. Between 2015 and 2018 the value of the assets he managed fell by half amid poor investments and client flight. The company has lost money in five of the last seven years. Even so, there have been years, such as 2018, in which he pocketed more than €200 million in commissions.

Crispin Odey has often been compared to George Soros. Both made a lot of money betting against the pound and bonds issued by the British Treasury.

The sexual misconduct allegations against Odey date back to 1998. In 2020, he even temporarily left the firm. And in 2021 he was acquitted in one of the cases. But the disclosures by the Financial Times — which include the account of a female employee whose breasts he allegedly touched and another woman in front of whom he allegedly masturbated — have ended the career of the U.K.’s most famous asset manager.

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