Barclays wants to end its corporate banking relationship, according to people familiar with the matter. This will put further pressure on Odey Asset Management as it struggles with its financial stability following allegations of sexual misconduct against its founder.
After the report that was published last month, 13 women claimed sexual harassment or assault by Crispin Odey.
Odey, the 64-year-old founder of the hedge fund, was acquitted for indecent assault just days after allegations were published. The 64-year old hedge fund founder had previously been acquitted for indecent assault. He denies these latest allegations.
Odey Asset Management announced last week, that two of their star managers are in advanced discussions to move funds, and that other deals are under discussion.
Three sources familiar with the matter said that Barclays was the fourth corporate bank to decide to end its relationship with Odey Asset Management, after JPMorgan, Goldman Sachs, and Morgan Stanley.
Two people confirmed that the bank had informed the Financial Conduct Authority of its intention to exit Odey Asset Management. Two people said that Barclays is responsible for Odey Asset Management payroll and other processes. This process will have to be managed carefully.
Odey Asset Management refused to comment whether Barclays informed the hedge fund of its intentions and whether it would be able to continue doing business without a corporate bank partner. Barclays refused to comment on the relationship it has with the hedgefund.
Odey Asset Management has told clients that it is trying to sell certain funds due to the impact of recent events, but it hasn’t publicly announced it was winding down.
A person familiar with regulatory issues said that hedge fund winddowns can be implemented without changing their registration status. Insolvency of a company would trigger formal processes, including possible appointment as a special administrator.
Odey Asset Management has lost its major banking partners, star fund managers and suspended several funds. It is also the subject of an ongoing investigation conducted by the FCA over corporate governance issues and other problems at the firm.
The investigation can continue, even if Odey Asset Management closes. However, the FCA’s recourse would be to publish any negative findings and censure any individual found to have breached their duty.
FCA has made findings against individuals who are no longer in the financial industry. One example is the 2014 censure of Jonathan Paul Burrows. He had already left his position as managing director at BlackRock Asset Management by the time he was found guilty for evading paying his train fares repeatedly.
The FCA did not confirm or comment publicly on the investigation of Odey Asset Management, but was asked to describe their dealings with Odey Asset Management at an upcoming hearing before the Treasury Select Committee.
Harriett BALDER, chairperson of the TSC told that she wanted to hear more from the FCA about the “nature and intensities” of their oversight of Odey Asset Management in the last five years. She also asked how the FCA handled any concerns raised by Crispin Odey.