Crispin Odey’s flagship hedge fund has bounced back from a five-year loss-making slump, teeing the fund up to rake in hefty performance fees.
Famed for his bearish calls, Odey had struggled to generate returns in the long-running bull market.
Between 2015 and 2020, his Odey European fund lost 62% in sterling terms, according to FE Fundinfo. Assets in the fund have shrunk from €3.1bn (£2.6bn) in 2015 to €245m (£208.5m) today.
While performance picked up in 2021, with the fund up 44%, in 2022, it has taken off thanks mainly to Odey’s bets against long-dated government bonds, which have sold off sharply as inflation runs rampant.
Odey European gained 14% in May, according to an investor document seen by Bloomberg News, boosting returns for the year to 110%.
The Odey Swan fund, which Odey is also lead manager on, has also enjoyed a strong trading period, rising 61% so far this year, though his other mandate, Odey Opus, is up just 10%.
Coupled with last year’s gains, this means Odey European is now above the high water mark set in 2015 and can charge performance fees.
Last year, Odey Asset Management raked in £39.8m in performance fees, a 4,341% spike from the £896k generated in 2020.
Short exposure to bond trades accounted for nearly 400% of Odey European’s net asset value at the end of April, according to the investment note. This was mostly down to two UK government securities that mature in 2050 and 2061.
However, the size of these positions has fallen as Odey has taken profits.
Earlier this year, he doubled his money on a controversial punt on Anglo-Russian miner Polymetal, which saw its share price crash following Russia’s invasion of Ukraine, but recouped some of its losses a month later.
Odey AM has continued shedding partners over the past year, with portfolio managers Rob Marshall-Lee and Tim Bond both out the door, as well as CEO Tim Pearey.
