JPMorgan is terminating its romantic relationship with Odey Asset Management, the last of the significant banking companies to cut ties with the organization in the wake of sexual misconduct allegations towards its founder Crispin Odey.
The US bank’s shift extra to the turmoil to strike the agency, which instructed customers it experienced shut Odey’s Swan fund and had stopped buyers from withdrawing revenue from two other folks run by its subsidiary, Brook Asset Administration, since of a larger volume of requests to withdraw.
JPMorgan has served discover on the two its prime broking and its custody agreements with Odey Asset Management, according to folks common with the problem.
JPMorgan declined to remark. Odey Asset Management declined to remark.
JPMorgan was one particular of Odey Asset Management’s vital interactions. Its termination of its relationships with the hedge fund follows a Economical Moments investigation that reported final week that Odey was struggling with allegations of sexual assault or harassment from 13 gals, which he denied.
Key brokers give a variety of products and services to their hedge fund purchasers, including stock lending, leverage and trade execution. Custodians safeguard their clients’ assets.
Morgan Stanley, Odey Asset Management’s other main primary broker, moved to minimize ties with the agency very last 7 days, as did Goldman Sachs and Exane.
But JPMorgan’s partnership with Odey Asset Management is extra challenging since as custodian of its property, it wants to discover another get together to get on these belongings as depositor, the people today reported.
Meanwhile, Odey Asset Management reported it had closed Odey’s Swan fund and had stopped investors from withdrawing funds from a few of other goods operate by its subsidiary Brook Asset Management, which was established up in November 2020.
Odey Asset Administration claimed it was liquidating the Swan fund, which manages €117mn, and returning dollars to shareholders immediately after the founder was ousted around the weekend from the business he established up in 1991.
Odey Asset Administration also informed consumers that it experienced gated redemptions in its Brook Formulated Markets fund owing to a increased quantity of requests to withdraw.
Website link Fund Options, the administrator to a variety of Odey Asset Administration resources, explained it experienced suspended working in yet another product or service, the Brook Complete Return fund.
The measure to halt purchaser withdrawals is a person of the emergency steps taken by Odey Asset Administration to contain the fallout. On Sunday, it declared that Odey would stop handling his funds and be changed by other fund professionals.
Odey Asset Administration mentioned the gating final decision was taken immediately after redemption requests exceeded 10 for every cent of the Brook Designed Marketplaces fund’s internet asset price. The fund, managed by James Hanbury and Jamie Grimston, runs $205mn of customers’ revenue.
The board claimed the redemption gate was “in the very best interests of all shareholders”.
The fund, which has risen 8 for every cent in excess of the past yr and has an ongoing charge of a lot more than 1 for every cent, counts office environment firm IWG, financial commitment trading business Furthermore500 and retailer Frasers Group among its best holdings. Its highest sector weighting is in client shares, followed by economic expert services providers.
Backlink told customers it suspended the issuance and buying and selling of shares in the Brook Absolute Return fund as it was “in the finest interests of all investors” just after taking into consideration “all related situation relating to Odey Asset Management”.
Odey Asset Management also faces a broader investigation by the Economical Conduct Authority, which opened a probe into feasible “non-financial misconduct” at the hedge fund two years ago. MPs are arranging to scrutinise the FCA up coming thirty day period more than its handling of misconduct allegations relating to Odey.
Furthermore500 stated in a stock trade announcement on Tuesday that it experienced ordered £101mn of its shares from Odey Asset Administration, representing about 8.2 per cent of its share funds.