JPMorgan cuts ties with Odey Asset Administration

JPMorgan cuts ties with Odey Asset Administration

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JPMorgan is terminating its partnership with Odey Asset Administration, the past of the huge banks to slash ties with the organization in the wake of sexual misconduct allegations towards its founder Crispin Odey.

The US bank’s go included to the turmoil to strike the business, which instructed purchasers it had shut Odey’s Swan fund and experienced stopped traders from withdrawing dollars from two other individuals run by its subsidiary, Brook Asset Management, for the reason that of a higher quantity of requests to withdraw.

JPMorgan has served observe on equally its prime broking and its custody agreements with Odey Asset Management, in accordance to folks common with the situation.

JPMorgan declined to comment. Odey Asset Management declined to comment.

JPMorgan was one of Odey Asset Management’s crucial relationships. Its termination of its associations with the hedge fund follows a Financial Instances investigation that documented last week that Odey was facing allegations of sexual assault or harassment from 13 girls, which he denied.

Key brokers give a selection of products and services to their hedge fund clientele, together with stock lending, leverage and trade execution. Custodians safeguard their clients’ assets.

Morgan Stanley, Odey Asset Management’s other principal prime broker, moved to slash ties with the firm very last 7 days, as did Goldman Sachs and Exane.

But JPMorgan’s relationship with Odey Asset Administration is much more challenging due to the fact as custodian of its belongings, it requirements to discover another social gathering to take on these property as depositor, the folks claimed.

Meanwhile, Odey Asset Administration said it experienced closed Odey’s Swan fund and experienced stopped buyers from withdrawing income from a pair of other merchandise operate by its subsidiary Brook Asset Administration, which was established up in November 2020.

Odey Asset Administration mentioned it was liquidating the Swan fund, which manages €117mn, and returning dollars to shareholders immediately after the founder was ousted about the weekend from the company he set up in 1991.

Odey Asset Management also explained to clients that it had gated redemptions in its Brook Created Marketplaces fund owing to a increased volume of requests to withdraw.

Backlink Fund Methods, the administrator to a selection of Odey Asset Administration money, reported it had suspended working in another solution, the Brook Complete Return fund.

The measure to halt customer withdrawals is one particular of the unexpected emergency steps taken by Odey Asset Administration to comprise the fallout. On Sunday, it introduced that Odey would cease running his resources and be replaced by other fund professionals.

Odey Asset Administration reported the gating decision was taken soon after redemption requests exceeded 10 per cent of the Brook Produced Marketplaces fund’s web asset worth. The fund, managed by James Hanbury and Jamie Grimston, operates $205mn of customers’ dollars.

The board reported the redemption gate was “in the very best passions of all shareholders”.

The fund, which has risen 8 for each cent about the earlier yr and has an ongoing cost of additional than 1 for each cent, counts business office enterprise IWG, financial investment trading business As well as500 and retailer Frasers Group among its leading holdings. Its greatest sector weighting is in buyer stocks, followed by monetary products and services corporations.

Backlink informed clientele it suspended the issuance and investing of shares in the Brook Absolute Return fund as it was “in the ideal passions of all investors” soon after contemplating “all suitable situation about Odey Asset Management”.

Odey Asset Management also faces a broader investigation by the Economic Perform Authority, which opened a probe into achievable “non-monetary misconduct” at the hedge fund two decades in the past. MPs are scheduling to scrutinise the FCA future thirty day period around its managing of misconduct allegations relating to Odey.

Moreover500 mentioned in a stock trade announcement on Tuesday that it experienced obtained £101mn of its shares from Odey Asset Management, representing about 8.2 for every cent of its share funds.