Ode Asset Management to be broken up

ODE Asset Management is being wound up, the beleaguered hedge fund firm said it is in “advanced discussions” to move some of its funds and employees to rival firms in the wake of sexual misconduct allegations against its founder.

The firm has struggled to contain a spirited crisis following an investigation by the Financial Times last week that reported allegations of sexual assault or harassment from 13 women against its founder, Crispin O’Day.

The move to break up the company, which comes a week after the FT published its investigation, could mark the end of one of London’s oldest hedge fund firms. It would be another blow for Crispin O’Day, who founded the Mayfair-based firm in 1991 but was pulled out of it last weekend in response to allegations of his behaviour. He vehemently denies these claims.

“He’s finally had his fall from grace,” said one of the women who spoke as part of the FT’s investigation. “I really hope that this will give others the jolt to make sure that their workplaces are safe where women can move forward.”

O’Day’s ouster from his eponymous firm was part of a steeper and steeper decline. The UK’s financial regulator is probing the firm, which has itself launched a parliamentary inquiry. Meanwhile, redemptions in several of Oday Asset Management’s funds were restricted this week after the group terminated relationships with major banking partners including Goldman Sachs and Morgan Stanley.

The firm fell into particularly dangerous territory when JPMorgan served notice on its agreement to protect assets for hedge fund clients as its custodian. Financial Conduct Authority rules state that as the outgoing custodian, JP Morgan will have to find a replacement to take over its role. This can be challenging as other financial institutions have moved quickly to terminate their relationships with the troubled group.

The firm said in a statement to clients on Thursday that it is “now in advanced discussions to reallocate funds and transfer certain fund management activities and individuals to other asset managers”.

“Any sale or re-housing is considered subject to any relevant regulatory approvals and due diligence with a view to an orderly transition of any asset and investors.”

It gave no further details. A person familiar with the process said regulators were being kept fully informed.

The firm said that while it was having “constructive talks” with its service providers, it had entered into discussions to break up the firm because “however it has become clear that some of the partnership’s investment management activities have been affected by recent events”. Are”.

The FCA declined to comment on the proposed transaction.

Additional reporting by Laura Noonan and Emma Dunkley in London