London, June 10, 2023 – In the aftermath of allegations of sexual misconduct surrounding its founder, Odey Asset Management finds itself shunned by big banks and investors. However, while this swift response may seem indicative of a deeper cultural shift within the City of London, signs of substantial change remain elusive.
The Financial Times and Tortoise Media revealed yesterday that 13 women have come forward, spanning a 25-year period, accusing Crispin Odey, a prominent figure in Britain’s hedge fund industry, of sexual assault and harassment.
Denying the allegations, Odey dismissed the report as a rehash of an old article, highlighting that no courtroom or investigative validation has been presented. It is worth noting that a British court acquitted Odey of indecent assault charges in 2021.
Odey Asset Management, in a letter to investors obtained by Reuters, vehemently denies the portrayal of the firm depicted by the allegations.
Within hours of the report’s release, reputable Wall Street firms, including Goldman Sachs, JPMorgan, and Morgan Stanley, commenced reviews of their prime broking relationships with Odey Asset Management, according to sources familiar with the matter.
The letter from Odey Asset Management, released later, expressed confidence that their service providers would continue collaborating with them.
By Friday, Canada Life, an asset manager overseeing approximately £40 billion ($50 billion) in client funds in Britain, promptly announced the suspension of its ties with Odey Wealth, a division of the Odey Group focusing on private clients. A spokesperson from Canada Life confirmed that the FT and Tortoise allegations were the driving force behind this decision.
Schroders, a British asset manager with over £700 billion in assets under management, confirmed its divestment from residual holdings in Odey funds following the FT’s report on the sexual misconduct allegations against Crispin Odey.
Despite Odey’s steadfast denial and lack of criminal conviction, the swift reactions from major banks demonstrate that even unproven allegations of misconduct can yield consequences in the post-#MeToo era that has reverberated across corporate, political, and entertainment sectors since 2017.
Nevertheless, industry experts consulted by Reuters caution against prematurely perceiving this as a significant cultural transformation in the City.
Evan Nierman, CEO of Red Banyan, a crisis PR firm based in New York, believes that the immediate distancing of major banks from Crispin Odey signifies their desire to avoid becoming the next targets of cancel culture campaigns. However, Nierman suggests that this issue currently pertains primarily to Odey, rather than marking a watershed moment for the broader British financial services industry.
In finance, where senior roles remain dominated by men, there is a growing focus on enhancing environmental, social, and governance standards.
Megan Tobias Neely, a former hedge fund analyst turned sociologist, and author of the book “Hedged Out: Inequality and Insecurity on Wall Street,” asserts that institutional investors exerting pressure may be the only viable avenue to bring about genuine change regarding the significant emotional and professional ramifications faced by women and others. Neely’s research on hedge funds reveals a disturbing pattern of retribution against women who report sexual harassment and discrimination, often leading to their forced departure from firms and, in some cases, exclusion from the entire industry.
A recent report from Financial News, citing a freedom of information request, indicates that bullying, harassment, and aggression form the majority of claims investigated by the UK regulator, the Financial Conduct Authority.
Daniel Beunza, a professor of social studies of finance at Bayes Business School, believes that the potential transformation of London’s
hedge fund landscape within the #MeToo context relies on the actions of institutional players, such as banks severing prime brokerage ties and investors halting fund flows.
Politicians also hold sway in this matter. Britain’s opposition Labour Party intends to return £100,000 in donations from Algebris founder and CEO Davide Serra following a harassment claim, as confirmed by a party official.
In a recent London employment tribunal, a former employee of Algebris was awarded over £32,000 in a sexual harassment claim against the asset management company.
Efforts to contact Serra for comment went unanswered, while Algebris declined to provide a statement.
Yasmine Chinwala, a partner at New Financial, highlights that the discussion surrounding diversity and culture in financial services reveals an unsettling truth: almost everything is tolerated as long as it benefits the bottom line. Despite the current momentum, this fundamental reality remains largely unchanged.
Note: Conversion rate as of the article’s date: $1 = £0.7950.