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Odey Asset Management is currently engaged in advanced discussions to transfer four funds, along with their manager, Oliver Kelton, to investment boutique SW Mitchell Capital. This move comes as the hedge fund faces the repercussions of sexual assault allegations against its founder, Crispin Odey.
In a letter sent to clients, Odey Asset Management revealed its plans to shift the following funds to SW Mitchell Capital: Brook Continental European, Brook European Focus, Brook European Focus Absolute Return, and Odey Pan European.
The largest of these funds is Brook European Focus, which currently manages assets worth €713 million. Oliver Kelton took over management of the Odey Pan European fund earlier this month, replacing Crispin Odey after he was ousted by partners due to the allegations.
These talks stem from Odey Asset Management’s previous announcement about deliberating fund transfers amidst the fallout from the allegations and a wave of investors withdrawing their money.
SW Mitchell Capital is the first potential buyer named since Odey Asset Management’s decision to dissolve itself, sparked by an FT investigation into accusations from 13 women. Crispin Odey vehemently denies these allegations. Odey Asset Management, founded in 1991, currently manages approximately $4.4 billion.
SW Mitchell Capital is a London-based investment boutique specializing in European equities. Established in 2005, the firm manages assets for a diverse range of clients including pension funds, charities, and financial advisers. Stuart Mitchell, the managing partner, and Oliver Kelton both previously worked at JO Hambro Investment Management.
At the moment, SW Mitchell Capital has not provided a comment on the potential deal, while Odey Asset Management declined to comment.
Odey Asset Management stated in their letter that the discussions with SW Mitchell Capital are subject to regulatory approval and approval from the funds’ boards. The letter also mentioned that similar discussions are taking place regarding other funds managed by Odey Asset Management.
In 2020, Odey Asset Management established a subsidiary called Brook to manage funds under a new brand, with managers other than Crispin Odey at the helm.
This latest development comes shortly after Odey Asset Management suspended trading in two funds previously managed by Crispin Odey. The firm attributed this suspension to customer redemptions.
Investor withdrawals have forced Odey Asset Management to suspend trading in multiple funds. Currently, a total of five funds, including the Swan fund, have been suspended. Odey Asset Management plans to liquidate the Swan fund and return the money to investors. The two hedge funds, Odey European Inc and OEI Mac, were subsequently suspended.
The decisions to suspend these funds came after Odey Asset Management’s banking partners, including JPMorgan, Goldman Sachs, and Morgan Stanley, terminated their prime broking relationships with the firm. JPMorgan also moved to sever its custodian relationship. Prime brokers provide hedge funds with loans to amplify returns and hedging products for loss protection, while custodians safeguard client assets.
Additional reporting by Costas Mourselas in London
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