Chiefs at Odey Asset Management have struggled to stabilize the firm after brokers Goldman Sachs and Exane and asset manager Schroders cut ties following allegations of sexual abuse against founder Crispin Odey.
The exodus came despite the hedge fund telling clients it was “confident that our service providers will continue to work with us” after 13 women told the Financial Times that Odey had harassed or assaulted them.
The most recent alleged sexual assault occurred in December 2021, when a woman known to Oddie said she was groped by him after dinner at his Gloucestershire estate.
The FT investigation also found that partners at Odey Asset Management were aware of his alleged abuse of women as far back as 2004, when a receptionist resigned and launched legal action against the firm. When the executive committee eventually issued a final written warning to Odey in 2021, he fired the committee.
A law firm representing Odey said the allegations against him were “seriously contested”.
Goldman Sachs has begun to dissolve its relationship with Odey Asset Management, people familiar with the situation said on Friday. Goldman, which said Thursday night it was “reviewing” the relationship, declined to comment.
Exane, which is owned by French bank BNP Paribas, told Odey Asset Management on Thursday evening that it was ending the relationship, according to people familiar with the development. Exane declined to comment.
Morgan Stanley had already moved to end its business with Odey. JPMorgan is reviewing its relationship, which includes custody and prime brokerage.
Regulators have also been kept abreast of developments in the firm’s relationships with prime brokers, a person familiar with the situation said.
Prime brokers are important to hedge funds, providing them with credit to facilitate their trading and selling of derivatives that allow them to manage risk.
A person familiar with the Financial Conduct Authority’s processes said the regulator could require a prime broker to retain ties to the hedge fund so it can run its business on a regular basis. The FCA declined to comment.
Meanwhile, Schroders has cut ties with Odey Asset Management, selling investments managed by the fund manager. UK-based Schroders said on Friday it had sold its remaining investment in the Odey’s Swan fund, which Schroders held in two of its multi-manager products.
Schroders had been selling its exposure to Odey Swan for the past few months, but completely unloaded the position in the past 24 hours, according to a person familiar with the situation.
A spokesman said: “Schroders is not invested in Odey Asset Management.”
Odey Asset Management declined to comment on the other companies’ decisions.
The firm is also facing a widening investigation by the FCA, which launched an investigation two years ago into potential “non-financial misconduct” at the company.
In a statement to clients, the firm’s chief executive Peter Martin said the “various allegations” were being “reviewed” by the firm’s lawyers and that it “takes, now and in the past, all such allegations extremely seriously”.
Crispin Oddie told Reuters on Thursday that Morgan Stanley’s move was “a massively quick response to an allegation by the FT”, adding that “none of the allegations have been substantiated in a courtroom or investigation”.
Additional reporting by Antonia Cundy and Paul Caruana Galizia