Odey to reopen James Hanbury fund as emergency transfer nears

Receive free Odey Asset Management LLP updates

We’ll send you a myFT Daily Digest email rounding up the latest Odey Asset Management LLP news every morning.

Odey Asset Management will reopen its Absolute Return fund as the beleaguered hedge fund firm prepares to transfer one of its star managers, James Hanbury, to a rival in the wake of sexual misconduct allegations against the firm’s founder, Crispin Odey.

A trading suspension on the LF Brook Absolute Return fund, which oversees £451mn and is managed by Hanbury, will be lifted on Friday as Odey Asset Management nears a deal to shift it to Lancaster Investment Management, according to a letter sent to investors and seen by the Financial Times.

The fund was among a number of products run by Odey Asset Management and its subsidiary Brook that were suspended last month as investors sought to withdraw their money in the wake of the scandal. Brook was established as a subsidiary in 2020.

The investor withdrawals followed an investigation by the Financial Times last month into allegations of sexual assault or harassment made by 13 women against Crispin Odey, who strenuously denies the allegations.

A number of banks, including JPMorgan Chase, cut ties with the hedge fund group following the investigation. Hedge funds require prime brokers for services including trade execution and custodians to safeguard clients’ assets. Odey Asset Management, which Crispin Odey founded in 1991, then said it would move certain funds and managers to rival firms.

The latest letter to investors said the suspension of Brook Absolute Return would be lifted as talks to transfer the product and its management team to Lancaster had “now reached a point where both parties are entering into a binding agreement”.

The letter, sent by the firm’s administrator Link, said the fund had “also received clarity” from its banking partners that they would continue to provide services and support.

It said: “As a result of these developments, we believe [the firm] can now manage the fund . . . and meet the expected level of redemptions. We have therefore decided, with the agreement of the fund’s depositary, the Bank of New York Mellon International Limited, that it is in the best interest of investors to lift the suspension in dealings in the fund.”

Earlier this month, Odey Asset Management also removed the suspension on the Brook Developed Markets fund, which manages $176mn.

Brook is in talks with Lancaster about transferring other funds run by Hanbury, including the Brook Developed Markets fund, Brook Absolute Return Focus fund, and Odey Opus fund. Lancaster is a London-based investment boutique founded in 2007 by fund managers Matthew Wood and James Roycroft.

In addition to Hanbury, Odey Asset Management is in “advanced talks” about shifting four funds run by Oliver Kelton to SW Mitchell Capital, a London-based European equities investment boutique.

SW Mitchell manages assets for clients globally, including pension funds, charities, and financial advisers. Its managing partner Stuart Mitchell used to work at JO Hambro Investment Management, where Kelton also used to work.

Brook Asset Management and Lancaster Investment Management both declined to comment.