Launched in 1992, Odey’s €1.4bn long/short equity fund previously had a maximum limit of 30% invested outside Europe.
Back in November, when Portfolio Adviser interviewed Odey, he described US banks as "beautiful" and said the country was in a sweet spot.
Now he is preparing to put his money where his mouth is and invest a greater amount of his flagship fund over there.
He said his "simple verdict" is that the US has got every chance of growing from here, while the rest of the world and Europe in particular will continue to experience anaemic growth.
His reasoning behind this is that Europe’s banks will fail to establish sufficient profitability to encourage the necessary credit growth to exit the crisis.
LTRO insufficient
While he admitted the LTRO had been helpful in what had been a "great" quarter for the fund (Q1) he said the lending spree had been ultimately insufficient.
"Banks throughout Europe are still being forced to borrow at too high an interest rate – a situation which can only be remedied by the ECB being at least three times more generous than it is being," he said in the fund’s latest factsheet.
Prospects in the US are better than those in Europe, he explained, because although locals in the country are still reasonably cautious about their own economic future, through European eyes America has achieved the perfect prize – profitable banking and affordable housing.
He also nodded towards the difference fracking technology had made to the US’ ability to extract oil and gas from shale.
"The US appears ready to enter an era when it will be exporting oil and gas and having cheaper energy costs than the rest of the world.
"Returns in Europe, without credit growth, can only be arithmetic. Returns in the US at least have the chance to be geometric. Equities love growth in profits that come from credit expanding, leading to individuals more as well as companies investing," he concluded.
Since the start of the year Odey Europe has returned 19.7% compared to 7.8% from its benchmark (to 31 March).
Last year Odey lagged the index, with the fund down 7.4% compared to only a 1% loss from the index.
