Ode discusses restrictions on EU fund withdrawals as founder sidelined

EU funds managed by Odd Asset Management are discussing restrictions on investor withdrawals as part of emergency measures to stem allegations of sexual misconduct against the hedge fund manager’s founder.

It came as the firm announced a series of management changes to funds run by Crispin O’Day before the market opened on Monday. The company is seeking to stabilize the business and create more distance between the firm and the financier following his ouster.

O’Day Asset Management’s board forced O’Day on Saturday after the Financial Times reported that he was facing allegations of sexual assault or harassment from 13 women. The allegations have prompted the Financial Conduct Authority, the UK watchdog, to widen the investigation into asset managers and the firm to sever ties with some of the major banks.

Restrictions on investor withdrawals are under consideration amid fears the firm will face higher outflows in the coming days, according to two people with knowledge of the discussions. He said the board overseeing EU investment funds (known as UKITS) is curbing redemptions – a measure called “gating” – if too many investors want their cash back at once. They said.

In a statement to clients Sunday night, Oday Asset Management said management of Oday’s OEI and OEI MAC — the firm’s oldest strategies and the one on which the hedge fund manager made its name — will be taken over by Freddy Neve.

The fund management of the global equity strategy LF Ode Opus Fund will be taken over by James Hanbury. Oliver Kelton will manage the Oday Pan European Fund.

With respect to the Ode Swann Fund, the Partnership is considering options for putting on board the Fund, which could include its closure. In the meantime, it would continue to be run by Neave, who co-managed it with Odey.

The company said it planned to “announce the full rebrand of the partnership in the near future”.

Oday Asset Management said it continues to be regulated by the FCA, with whom it “has been in regular communication . . . throughout this process”. I was

ODE Asset Management’s USITS strategies include two ODE funds, which have been allocated to new Dublin-based £100 million managers. Ode Swan Fund and £20mn Ode Pan-European Fund, The Fund could not immediately comment on possible restrictive measures.

The Board of Ucits is independent of ODE Asset Management and has an obligation to the underlying shareholders of the fund. Gating is a normal response to destabilizing redemption demands. This has recently been called upon by some UK property funds due to difficult market conditions.

Oday Asset Management has about $4.4 billion in assets under management and may also decide to impose restrictions on other funds if necessary to protect investors, the people said. Oday Asset Management declined to comment.

FCA declined to comment. A person familiar with the situation said the gating was generally a matter for the funds, not their regulator.

On Thursday, Morgan Stanley, one of the largest prime brokers at ODE Asset Management, exited the business. It declined to comment Sunday on whether it would revisit that decision given subsequent changes within the firm. Prime brokers are important to hedge funds because they offer leverage, manage their trades and allow them to hedge their risk.

JPMorgan, one of O’Day’s key banking relationships, continues to “review” the situation, said a person familiar with the bank’s situation. “We will have to consider . . . the new information (of Saturday) so that is part of our review,” the person said. “The fact that we have prime (broking) and custody while other banks do does not mean that We have a lot more to consider.”

Peter Martin, chief executive of Oday Asset Management, and Michael Aday, chief financial and operating officer, said on Saturday that Oday “will no longer have any financial or personal involvement” in the partnership.

O’Day stepped down as co-chief executive of the firm in November 2020, four months after he was accused of impropriety with a junior bank employee. He was found not guilty the following March. The FT reported on Thursday that 13 women alleged that O’Day sexually assaulted or harassed them in various incidents over a period of 25 years.

In a separate statement on Saturday, O’Day Asset Management said it was “investigating the allegations relating to Mr. O’Day”, without elaborating.

A law firm representing O’Day previously said the allegations against him were “highly disputed”. O’Day said last week that “none of the allegations have stood up in court or in the investigation”.