Executives at Odey Asset Management were fighting to stabilise the firm after brokers Goldman Sachs and Exane and asset manager Schroders cut ties in the wake of sexual assault allegations against founder Crispin Odey.
The exodus came as the hedge fund told clients it was “confident that our service providers will continue to work with us” after 13 women told the Financial Times that Odey had harassed or assaulted them.
The most recent alleged sexual assault took place in December 2021 when a female acquaintance of Odey said she was violently groped by him after a dinner party at his Gloucestershire mansion.
The FT investigation also found that partners at Odey Asset Management were aware of his alleged mistreatment of women as far back as 2004 when a receptionist resigned and initiated a legal complaint against the firm. When the executive committee eventually issued a final written warning to Odey in 2021, he fired the committee.
A law firm representing Odey said allegations made against him were “strenuously disputed”.
Goldman Sachs has begun unwinding its relationship with Odey Asset Management, including Brook Asset Management, people familiar with the situation said on Friday. Goldman, which on Thursday night said it was “reviewing” the relationship, declined to comment.
Brook Asset Management is a subsidiary set up in November 2020 that runs almost half of the firm’s funds, including those by partners James Hanbury and Oliver Kelton.
Exane, which is owned by French bank BNP Paribas, told Odey Asset Management on Thursday night that it was terminating the relationship, according to people with knowledge of the development. Exane declined to comment.
Morgan Stanley had already moved to end its business with Odey. JPMorgan is reviewing its relationship, which includes custody and prime broking.
Regulators were also being kept abreast of the evolution of the firm’s relationships with prime brokers, a person familiar with the situation said.
Prime brokers are important to hedge funds, providing them with credit to facilitate their trading and selling derivatives that allow them to manage risk.
A person familiar with the Financial Conduct Authority’s processes said the regulator might ask that one prime broker retained ties with the hedge fund so that it could run its business in an orderly way. The FCA declined to comment.
Meanwhile, Schroders has cut ties with Odey Asset Management by selling investments run by the fund manager. UK-based Schroders said on Friday that it had sold its remaining investments in Odey’s Swan fund, which Schroders held in two of its multi-manager products.
Schroders had been selling down its exposure to Odey Swan over the past couple of months, but completely offloaded the position over the past 24 hours, according to one person familiar with the situation.
Schroders said it was “not invested in Odey Asset Management”.
Odey Asset Management declined to comment on the other companies’ decisions. Brook Asset Management did not respond to a request for comment.
The firm also faces a widening probe by the FCA, which opened an investigation two years ago into potential “non-financial misconduct” at the company.
In a statement to clients, the firm’s chief executive Peter Martin said that the “various allegations” were being “looked into” by the firm’s lawyers and that it “treats, now and in the past, all such allegations extremely seriously”.
Crispin Odey on Thursday told Reuters that Morgan Stanley’s move was “a massively quick reaction to an allegation by the FT”, adding that “none of the allegations have been stood up in a courtroom or an investigation”.
Additional reporting by Antonia Cundy and Paul Caruana Galizia
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