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Barclays is seeking to terminate its company banking relationship with Odey Asset Administration, individuals accustomed to the state of affairs informed the Monetary Instances, heaping additional stress on the hedge fund because it struggles to remain afloat following sexual misconduct allegations towards its eponymous founder.
A string of banks served termination notices on Odey Asset Administration for the prime broking and custody relationships essential to run a hedge fund after the FT reported final month that 13 girls had alleged sexual assault or harassment by Crispin Odey.
These notices stay in place regardless of Odey being ousted inside days of the allegations being printed. The hedge fund’s 64-year-old founder was beforehand acquitted of indecent assault and strenuously denies the newest sexual misconduct claims.
Odey Asset Administration, which oversaw investments value round $4.4bn earlier than the allegations broke, introduced final week that two of its star managers have been in superior talks to move their funds and that different offers have been beneath dialogue.
Three individuals accustomed to the state of affairs informed the FT that Barclays, Odey Asset Administration’s company financial institution, had change into the newest to resolve to terminate its relationship with the hedge fund, following JPMorgan, Goldman Sachs and Morgan Stanley, who’ve already cut ties with the 32-year-old agency.
The financial institution has informed the Monetary Conduct Authority it desires to extricate itself from Odey Asset Administration, two of the individuals mentioned. Certainly one of them added that the method must be fastidiously managed as a result of Barclays administers processes akin to Odey Asset Administration’s payroll, which it can’t merely stroll away from.
Odey Asset Administration declined to touch upon whether or not the hedge fund had been notified of Barclays’ intentions, and whether or not it might keep on enterprise in the long run and not using a company banking associate. Barclays declined to touch upon its relationship with the hedge fund.
Whereas Odey Asset Administration has told clients it’s making efforts to promote some funds due to the influence of “current occasions”, it has not publicly mentioned it’s winding down its enterprise.
Hedge fund winddowns, which may take a number of months, will be enacted with none change to their registration standing, an individual accustomed to the regulatory state of affairs informed the FT. If an organization turns into bancrupt, that will set off a proper course of together with the potential appointment of a particular administrator.
In addition to dropping its primary banking companions and star fund managers, and suspending a number of funds, Odey Asset Administration stays the topic of a two-year-old investigation by the FCA into company governance and different points on the agency.
That investigation can proceed even when Odey Asset Administration is wound down, though any recourse from the FCA could be restricted to publishing antagonistic findings and censuring any people who have been discovered to have failed of their duties.
The FCA has precedent in making findings towards people now not lively within the monetary providers business, together with the 2014 ban towards Jonathan Paul Burrows, who had already stepped down as a managing director at BlackRock Asset Administration when he was censured for serial evasion of paying for his practice fare.
The FCA has not publicly commented or confirmed the investigation into Odey Asset Administration however has been requested to explain its dealings with the agency at a listening to by the Treasury choose committee later this month.
Harriett Baldwin, chair of the TSC, told the FCA she want to hear from them on the “nature and depth” of their supervision of Odey Asset Administration over the previous 5 years, together with how the regulator dealt with any issues flagged about Crispin Odey.
Extra reporting by Jane Croft
