Odey Asset Management (OAM) is closing one fund and restricting money clients can pull from another, two investor letters showed, just as the hedge fund was scrambling on Tuesday to keep its prime brokers from ending vital relationships with the firm.
These developments follow allegations of sexual misconduct by its founder, Crispin Odey, reported by the Financial Times and Tortoise Media last week. Odey denies the allegations.
Also on Tuesday, the FT reported that JPMorgan , one of three prime brokerages that offer vital leverage for the hedge fund, had served notice on its service agreements, cutting ties with OAM. A source familiar with the matter told Reuters on Saturday that Goldman SachsJPMorgan and Goldman Sachs declined to comment. Morgan Stanley also declined to comment on Tuesday as to whether it had decided the same.
The board of Odey Asset Management also decided to suspend the issue, conversion and redemption of Swan Fund shares in order to "efficiently manage the redemptions and in the best interests of Shareholders," the investor letter showed. Crispin Odey has denied the allegations of misconduct, which were jointly reported by the Financial Times and Tortoise on Thursday.It is the responsibility of a fund's board to protect other retail customers from the falling value of a fund if there is a rush of investor exits. Brook Developed Markets Fund is open to retail investors and had about $216 million, as of the end of February, the latest data from Morningstar showed.
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