How important it is for companies to pay attention to a good working atmosphere is illustrated by the case of the British hedge fund manager Odey Asset Management (OAM). Allegations of abuse were made against the former star hedge fund manager Crispin Odey. What is true about this will have to be decided by the courts. But the implications for the company are already real and significant.
What happened so far
Hedge fund managers must be equipped with a good portion of self-confidence, because their goal is to swim against the tide. That this big ego, which is apparently necessary for the job, can also have a flip side is currently shown by the accusations made against the former star hedge fund manager Crispin Odey (64). He is the founder and main owner of the London investment boutique Odey Asset Management (OAM), which among other things manages the hedge fund he founded in 1991.
A total of 13 women had stated in a Financial Times article in early June 2023 that Odey had harassed or abused them. Among the women are also former employees. They report that they found the working atmosphere at Odey Asset Management to be "poisoned" and that the company did not investigate assaults and harassment against women. The asset management house does not acknowledge the negative corporate image painted by the FT and states that "employee welfare is a core part of the company's culture". It complies with all legal and regulatory obligations.
Crispin Odey denies the allegations
The specific incidents are said to have taken place over several decades - between 1998 and 2021. Crispin Odey denies the attacks, calling them "nonsense" to the FT. He says through his lawyers that he believes the FT has a "predetermined agenda".
To avert further damage to their image, Odey Asset Management and Crispin Odey have parted ways. At least he is no longer a member of the partnership; he is still the main shareholder of OAM. In addition, the management of some funds is being changed, and the Odey Swan Fund may even be considered for closure.
Massive negative impact on business
The allegations are already having a massive business impact, even before a court has confirmed them or not. According to market participants, various service providers, such as prime brokers, have already turned away from the company, including Goldman Sachs, JPMorgan, Morgan Stanley and UBS.
Clients are also running away. While Odey Asset Management managed AUM of over $13 billion at peak times, funds had shrunk to $3.8 billion by 2022 and appear to be shrinking further. A 70% or more decline in funds under management is a severe loss for an asset manager and shows the fierce impact that mere accusations of an unsavoury working atmosphere can have.
Anke Dembowski is a financial journalist and author of various investment fund-related and other financial books. She is also a co-founder of the "Fondsfrauen" network.