Odey Asset Management shutters amid sexual assault case
Odey Asset Management (OAM), including its affiliates Brook Asset Management and Odey Wealth, announced its closure five months after founder Crispin Odey faced allegations of sexual misconduct from junior female staff members.
The hedge fund, founded by Odey 32 years ago, has been in turmoil since these allegations emerged, leading to a massive outflow of investors and the severing of ties by key financial partners.
The decision to shut down was posted on the company’s website, noting that fund managers and funds have transitioned to new asset managers. Earlier, OAM had already revealed plans to wind down its wealth management arm. The crisis deepened after the Financial Times reported claims from 13 women accusing Odey of abuse or harassment over several decades. The number of allegations eventually rose to 20, including 12 former employees of the firm.
In an attempt to stabilize the situation, OAM removed Odey from the business and eliminated his name, but this was insufficient to regain investor confidence. Several influential institutions, including Schroders and Canada Life, withdrew from dealings with OAM following the allegations.
At its peak, OAM managed $13.3 billion in assets, which dwindled to $3.8 billion last year. Accusations have also surfaced that senior executives at OAM were aware of some misconduct allegations for up to 16 years before formally investigating Odey’s conduct.
Odey, a prominent figure in London’s hedge fund scene and a Conservative party donor, has denied the initial allegations of misconduct. However, he admitted to one incident when the 20th woman came forward, attributing it to the effects of an anesthetic from a dental procedure.
The closure of OAM has been linked not only to the scandal but also to the departure of key fund managers and the firm’s relocation from its Mayfair office. The UK’s Financial Conduct Authority has opened probes into both Odey and the firm but declined to comment on the matter.
Two of Odey’s alleged victims have filed a lawsuit against him and the firm for personal injury and psychological harm, a case yet to receive a formal response and currently filed in London’s High Court.
Earlier in June, Plus500 Ltd (LON:PLUS) bought back 7.3 million shares, which represents 8.2% of its issued share capital, from the beleaguered hedge fund.
Odey Asset Management has invested in Plus500 since disclosing a stake in the company in August 2015. Since then, it raised its holdings many times, particularly in 2019 when the CFD provider’s shares lost nearly one-third of its value amid material operational and financial impact from ESMA’s regulations.