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Odey profit plunges on performance fee wipeout

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Odey profit plunges on performance fee wipeout

Profit at Odey Asset Management has plunged on the back of a massive slump in performance fees.

According to accounts filed with Companies House over the festive period, Crispin Odey’s (pictured) hedge fund boutique saw profit dive from £44.23 million in the previous year to £18.6 million in the 12 months to 5 April 2017.

Performance fees were virtually wiped out from £19.2 million in 2016 to a meagre £60,000.

The Odey partnership had an average of 17 members over the year, which it shared the depleted profit between. The member with the largest entitlement, likely to be Crispin Odey, saw their income fall from £9.5 million to £5.5 million over the 12 months.

The latest set of accounts represent a continued downward trend at Odey, which two years ago raked in a profit of £143 million on performance fees of £58 million.

The decline reflects a tough period for Crispin Odey’s flagship hedge fund, which launched in 1991.

While he was well prepared for Brexit having campaigned for the UK to leave Europe in the 2015 referendum, he was wrong-footed in a number of other areas. These included the fall in the US dollar and the level of financial stimulus in Europe and China.

Other calls which have gone wrong for Odey in the last two years include a leveraged bet on the Australian dollar, which turned sour at the start of 2015.

In a note to clients in November Odey, who made a fortune during the 2008 credit crunch, admitted the last two years had ‘not been good’.

However, he indicated he would be increasing the intensity of his bearish stance on the eight-year old bull run in anticipation of a crash, based on the view that markets are starting to go ‘hyperbolic’.

‘The idea that we will continue along the lines of the last 10 years looks a dangerous starting point for strategic thinking,’ Odey wrote in his note to clients. 

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