The week the City ditched Crispin Odey

The entrance to Odey Asset Management’s headquarters was quiet on Thursday morning. The blinds of the Mayfair townhouse were drawn, to protect against a glaring June sun and prying eyes, but the turmoil inside one of London’s oldest hedge funds could not be concealed.

The firm had just signalled that its business could be dismantled, with talks under way to hive off some of its funds and staff in snap deals with rival investment houses. 

Its break-up was confirmed a week after the Financial Times detailed allegations made by 13 women who said they had been sexually harassed or assaulted over 23 years by the firm’s founder, Crispin Odey. He strenuously disputes the allegations.

The fallout has rippled across the City of London, potentially marking a landmark moment for the #MeToo movement. While no formal findings have been made against Crispin Odey, the allegations not only severely damaged the reputation of one of the UK’s richest men and a prominent donor to the ruling Conservative party but the effect on his hedge fund, which had $4.4bn under management, was also swift: banks cut ties and investors demanded their money back as MPs and regulators circled. 

The saga raises questions about how a man with a long record of alleged misconduct was allowed to carry on, seemingly unimpeded, and whether companies and regulators act robustly enough when they receive reports of sexual misconduct in the workplace. 

“Too often it is necessary for multiple women to speak out like in the Odey case, and even then the risk of being ignored is high, with major ramifications for the woman’s career,” said Grace Lordan, founding director of the Inclusion Initiative at the London School of Economics. 

Hanneke Smits, global chair of the 30% Club, a campaign for gender equality on boards, was more blunt. “The stubborn persistence of harassment and the lack of action to either prevent it or put a stop to it is shocking,” she said. 

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On June 8, hours after the FT revelations, alumni of Barings International, the bank where Crispin Odey, now 64, had worked in the 1980s, gathered in London for a reunion. He had been expected to attend. But the Brexit-backer was nowhere to be seen and was instead a topic of conversation among old colleagues, said attendees. 

A few hours earlier, Odey Asset Management had suffered a severe blow: Morgan Stanley informed the firm that it was cutting ties. 

The Wall Street behemoth was one of the banks offering Odey Asset Management prime broking; an important service to hedge funds, providing stock lending, leverage and trade execution.

Exane, the equity brokerage owned by BNP Paribas, followed suit.

By Friday Goldman Sachs, another of Odey’s prime brokers, had begun terminating its relationship. Goldman had previously reviewed its association with Crispin Odey during his 2021 trial for indecent assault of a junior female banker, but continued to do a small amount of business with the fund manager’s firm after he was acquitted.

Odey Asset Management’s top bosses — including Crispin Odey himself, chief executive Peter Martin and chief financial and operating officer Michael Ede — held a crisis call on the morning of June 9 with the boards of the firm’s Cayman and Irish-domiciled funds. 

The conversation focused on how to stabilise the firm and the call lacked any sense that Crispin Odey was going to leave, said a person familiar with the discussions. 

“The priority was prime brokers, […] the firm could not survive without prime brokers,” the person said, adding that conversations were also had about possibly limiting withdrawals if investors seeking to extract money spiked in number.

While, at first, the firm’s partners felt the banks’ reaction had been too harsh, by Saturday they had concluded that their boss needed to go.

Contacted by the FT that lunchtime, Crispin Odey confirmed he had been told of the plan to push him out but hinted that he would fight it. “How are they going to do that?” he said. “You have to have a willing buyer, [and a] willing seller.” 

Less than an hour later, the firm had issued a statement saying its founder was leaving. “As from today, he will no longer have any economic or personal involvement in the partnership,” it said. 

Crispin Odey, who founded his firm in 1991 and had $600mn of his own money in its funds, was not bought out by the other partners. He was removed under another mechanism by which he will get back the capital he had put into the business, according to people with knowledge of the situation.

The firm declined to comment. Crispin Odey did not respond to requests seeking comment.

With its founder ousted, some of the firm’s remaining partners believed at the start of this week that relationships with prime brokers could be salvaged. Within days, they were contemplating the firm’s endgame. 

Crispin Odey’s exit was not enough to stop JPMorgan Chase, Odey Asset Management’s biggest prime broker and its sole custodian, from abandoning it. The US bank — which continued its relationship with Jeffrey Epstein after he was convicted of soliciting a minor for prostitution and recently agreed to a $290mn settlement with his victims — served a termination notice on Monday evening. 

It is a regulatory requirement for hedge funds operating in the UK to have in place a custodian, which safeguards client assets.

The firm told investors it was in “advanced discussions” about breaking up its business by “rehousing” certain fund management activities and individuals working for the business. 

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Beyond the effect on Crispin Odey and his hedge fund, the allegations of decades of harassment and abuse — which span from 1998 to 2021 — have sparked wider questions about gender discrimination in finance and how businesses respond to complaints of misconduct. 

The firm’s female staff had been warned by colleagues for years not to enter a lift alone with him, or to agree to shopping trips with him. He had managed to cling on at the firm even after executives tried to rein in his behaviour. 

On hearing that Odey Asset Management was in talks to offload some of its funds to other investment houses, one of the women who spoke to the FT for the investigation said she hoped it would lead to wider change in the finance industry. “Will there be any self-reflection on the parts of those who worked with him for such a long time?” she asked. 

Tara Cemlyn Jones, chief executive of 25X25, a campaign to boost the number of female chiefs at FTSE 100 companies, told the FT she believed workplace sexual harassment was less of a problem than in earlier years but that other forms of gender discrimination were “still rampant”. 

“I think there’s certain areas of financial services where you still have very aggressively male cultures,” she said. 

Smits at the 30% Club said that for the changes to be meaningful, companies needed to back up policies with concrete action. 

“Today most workplaces have policies and procedures in place to deal with misconduct,” said Smits at the 30% Club. “However, if inappropriate behaviours are tolerated, and people not held responsible for how they act, ultimately these steps will be ineffective.” 

Additional reporting by Emma Dunkley and Akila Quinio in London

The downfall of Crispin Odey

It took just seven days for Crispin Odey and his firm, one of the oldest hedge funds in the City of London, to unravel after the FT published an investigation into allegations of sexual assault and harassment by him. The prominent Brexit supporter and Conservative party donor, known for making large contrarian bets, founded Odey Asset Management in 1991. But its future, barely a week after the publication of the allegations, is left hanging by a thread.

Thursday 8 June

FT publishes an investigation detailing Crispin Odey’s alleged sexual assaults spanning decades. Thirteen women accuse the City financier of harassment and abuse; eight alleged he sexually assaulted them. A law firm representing Odey said the allegations against him were “strenuously disputed”.

Friday 9 June

Fallout gathers pace with prime brokers cutting ties with the funds linked to Odey Asset Management. Goldman, Exane, Morgan Stanley all reviewing their relationship with the firm, Meanwhile Schroders said it had sold its remaining investment in one of the firm’s funds.

Saturday 10 June

Partners at Odey Asset Management move to remove Crispin Odey and his Odey Asset Management Group Limited as members of the overall firm. The funds will now be run and controlled by the remaining partners, they say. Crispin Odey suggests to the FT he might fight their decision.

Monday 12 June

Odey Asset Management says it is liquidating its Swan fund, which manages €117mn, and will return money to shareholders. It tells clients that it has also gated its Brook Developed Markets fund because of the volume of redemption requests.

Tuesday 13 June

JPMorgan moves to terminate its custodian relationship with Odey Asset Management, putting the firm in a potentially perilous situation as it is a regulatory requirement for hedge funds to have a custodian, which safeguard client assets.

Wednesday 14 June

MPs write to the financial regulator demanding to know what action it took after it received a report from Odey Asset Management in early 2021 detailing inappropriate behaviour by Crispin Odey. Meanwhile, UBS becomes the latest bank to sever its prime broking relationship.

Thursday 15 June

Odey Asset Management says it is in advanced discussions about rehousing funds and transferring certain fund management activities and individuals to other asset managers.

Friday 16 June

The FT reports that the firm has halted trading in a fourth fund since the scandal first broke.