The calm entrance to the headquarters of Odey Asset Management was disrupted on a quiet Thursday morning. Despite the drawn blinds protecting against the sun and prying eyes, the turmoil inside one of London’s oldest hedge funds was impossible to conceal. The firm had announced that it might dismantle its operations, engaging in talks to transfer funds and staff to rival investment firms. This confirmation came in the wake of allegations made against the firm’s founder, Crispin Odey, by 13 women who claimed to have experienced sexual harassment or assault over a span of 23 years. Odey vehemently denies these allegations. The aftermath of these revelations has had far-reaching effects, potentially serving as a significant moment for the #MeToo movement. While no formal verdict has been reached regarding Crispin Odey, the accusations against him have severely damaged his reputation as one of the wealthiest men in the UK and an influential donor to the Conservative party. The repercussions also extended to his hedge fund, which managed $4.4 billion in assets, as banks severed ties and investors withdrew their money – all while lawmakers and regulators closely observed the situation. This saga raises questions about how a man with a history of alleged misconduct could continue unabated, and whether companies and regulators respond robustly when faced with reports of sexual misconduct in the workplace. Grace Lordan, the founding director of the Inclusion Initiative at the London School of Economics, stated that it often takes multiple women speaking out, as seen in the Odey case, and even then there is a high risk of being ignored, with significant implications for a woman’s career. Hanneke Smits, the global chair of the 30% Club, a campaign for gender equality on boards, expressed shock at the persistent problem of harassment and the lack of action taken to prevent or address it. On June 8, alumni of Barings International, the bank where Crispin Odey had worked in the 1980s, gathered for a reunion in London. Odey, who was expected to attend, was noticeably absent, becoming the topic of conversation among former colleagues. Just hours earlier, Odey Asset Management received a severe blow when Morgan Stanley informed them of their decision to sever ties. This move by the Wall Street behemoth was significant since they provided Odey Asset Management with prime broking services, essential for hedge funds and including stock lending, leverage, and trade execution. Exane, the equity brokerage owned by BNP Paribas, followed suit, as did JPMorgan, who terminated their custodian relationship with Odey Asset Management. By Friday, Goldman Sachs, another of Odey’s prime brokers, began the process of ending their association. Goldman had previously reviewed their connection with Crispin Odey during his trial in 2021 for indecent assault, but continued to do limited business with his firm after he was acquitted. On June 9, top executives of Odey Asset Management held a crisis call with the boards of the firm’s Cayman and Irish-domiciled funds. The call centered around stabilizing the firm, and there was no indication that Crispin Odey would be leaving, according to a person familiar with the discussions. The person added that the priority was retaining prime brokers since the firm could not survive without them. The conversation also dealt with the possibility of limiting withdrawals if there was a surge in client requests. Initially, the firm’s partners felt that the banks’ actions were overly harsh, but by Saturday, they concluded that Odey needed to depart. When contacted by the Financial Times, Crispin Odey acknowledged being informed of the plan to remove him but questioned how it could be accomplished without a willing buyer or seller. Within an hour, the firm issued a statement confirming his departure. Odey, who founded the firm in 1991 and personally invested $600 million in its funds, was not bought out by the other partners. Instead, he was removed through another mechanism that allowed him to recover the capital he had invested, according to sources knowledgeable about the situation. The firm declined to comment, and Crispin Odey did not respond to requests for comment. With Odey ousted, some of the remaining partners initially believed they could salvage relationships with prime brokers. However, within days, they found themselves contemplating the endgame for the firm. Despite Odey’s departure, JPMorgan Chase, the fund’s largest prime broker and sole custodian, decided to sever ties. This move was significant since UK hedge funds are required by regulations to have a custodian to safeguard client assets. Odey Asset Management informed investors that it was in advanced discussions regarding the breakup of its business, exploring options to relocate certain fund management activities and personnel. The allegations of harassment and abuse spanning decades have prompted broader discussions about gender discrimination in finance and how companies handle misconduct complaints. Female staff members at the firm had been cautioned by their colleagues for years against being alone with Crispin Odey in elevators or accepting shopping trips with him. Despite attempts by executives to rein in his behavior, Odey managed to retain his position at the firm. One woman who spoke to the Financial Times expressed hope that the talks of offloading funds to other investment firms would bring about wider change in the finance industry. Tara Cemlyn Jones, CEO of 25X25, a campaign to increase the number of female executives in FTSE 100 companies, stated that while workplace sexual harassment may be less prevalent than in the past, other forms of gender discrimination are still rampant. She pointed out that certain areas of the financial services industry still have aggressively male-dominated cultures. Hanneke Smits of the 30% Club emphasized that for meaningful change to occur, companies must go beyond policies and take concrete actions. Although most workplaces now have policies and procedures in place to address misconduct, they will be ineffective if inappropriate behavior is tolerated and people are not held accountable for their actions.
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