- Odey Asset Management’s assets under management fell from $11.7 billion at the start of 2015 to $5.5 billion. Decline due to bearish bets on a financial crisis not paying off and client redemptions.
LONDON – One of the City of London’s best-known hedge funds has seen its assets under management halve since 2015 due to bad bets and client outflows.
The Financial Times reported that Odey Asset Management’s assets under management fell from $11.7 billion at the start of 2015 to $6 billion at the end of August, according to a client letter seen by the paper.
In fact, things appear even worse – Odey Asset Management’s website states that assets under management are $5.5 billion as of 29 September 2017. The decline has been driven by a combination of poor performance and redemptions from clients.
Odey Asset Management was founded by Crispin Odey, an investor famed for his successful trading of the financial crisis. The firm’s OEI Mac fund delivered 43.4% in 2008 as shorts against banks paid off.
Odey Asset Management did not immediately respond to Business Insider’s request for comment.
However, the FT said Odey’s recent performance has been hampered by similarly bearish bets. The hedge fund manager believes the world is heading for another crash, driven by loose monetary policy and Chinese debt, but his bets against bonds and assets inflated by recent loose monetary policy have so far failed to pay off.
Business Insider reported last year that Odey’s flagship fund halved in value in 2016, its worst year on record, and the FT reported that the fund has slid a further 15% in the year to August. It means gains stretching back to 2007 have been wiped out.
Odey was a prominent supporter of the campaign to leave the European Union in last year’s referendum. He was one of the founders of the “Vote Leave” group, which became the official Brexit campaign, and is donated just over £500,000 to the cause.
A fund manager at Odey Asset Management reportedly made £110 million betting against the pound in the immediate aftermath of the Brexit vote but Odey himself has been bearish on the vote’s economic effects, warning clients last year of likely recession in Britain and a collapse in stock values.