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Odey Asset Administration is in “superior talks” about transferring 4 funds and their supervisor, Oliver Kelton, to funding boutique SW Mitchell Capital, because the hedge fund reels from sexual assault allegations towards its founder Crispin Odey.
In a letter to shoppers on Tuesday and seen by the Monetary Occasions, Odey Asset Administration stated the funds it’s aiming to shift embrace Brook Continental European, Brook European Focus, Brook European Focus Absolute Return, and Odey Pan European.
In keeping with the agency’s web site, the biggest of those is Brook European Focus, which has €713mn property below administration. Kelton took over the Odey Pan European fund earlier this month from Crispin Odey after companions on the agency he based ousted the financier in response to the allegations towards him.
The talks come after the agency said earlier this month that it was in superior discussions about shifting funds to rivals, as a part of broader measures to include the fallout from the allegations and as buyers rushed to withdraw their cash.
SW Mitchell Capital is the primary named potential purchaser for the agency’s property since Odey Asset Administration introduced it was to be damaged up two weeks in the past, within the wake of an FT investigation into accusations from 13 ladies. Crispin Odey strenuously denies the allegations. Odey Asset Administration, established in 1991, manages about $4.4bn.
SW Mitchell Capital is a London-based European equities funding boutique, based in 2005. The agency manages property for shoppers globally, together with pension funds, charities, and monetary advisers.
Its managing associate Stuart Mitchell used to work at JO Hambro Funding Administration, the place Kelton additionally used to work.
SW Mitchell Capital didn’t instantly reply to a request for remark. Odey Asset Administration declined to remark.
Odey Asset Administration stated in Tuesday’s letter that talks with SW Mitchell are nonetheless topic to approval from regulators and the funds’ boards. The letter added that “related discussions are ongoing in relation to different funds” managed by Odey Asset Administration.
The agency created a subsidiary in 2020 below a brand new model, Brook, for funds that have been run by managers aside from Crispin Odey.
The most recent improvement comes hours after Odey Asset Administration informed shoppers that it was suspending trading in two of its funds that have been beforehand run by Crispin Odey. The agency halted buying and selling in its flagship Odey European Inc and OEI Mac funds, which it stated in a word to buyers was due to buyer redemptions.
Odey Asset Administration has been compelled to droop buying and selling in a lot of its funds as buyers have sought to withdraw their cash.
Till this week, 5 funds have been suspended, together with its Swan fund which the agency stated can be liquidated and cash returned to buyers. The 2 hedge funds — Odey European Inc and OEI Mac, have been subsequently suspended.
The funds got here below stress after Odey Asset Administration’s banking companions, which included JPMorgan, Goldman Sachs, and Morgan Stanley, pulled the plug on their prime broking relationship with the agency. JPMorgan additionally has moved to sever its custodian relationship. Prime brokers present hedge funds with loans to amplify returns and hedging merchandise to guard towards losses, whereas custodians safeguard consumer property.
Further reporting by Costas Mourselas in London
