Crispin Odey’s flagship European fund sank back into negative territory last year at a time when the hedge fund industry enjoyed its best yearly performance in a decade.
Odey European languished near the bottom of funds in the FO Hedge/Structured Product Mixed sector at the end of 2019, after enjoying one of its strongest years in 2018.
The €155m (£130.6m) fund lost investors 15.1% in sterling terms, according to data from FE Fundinfo, compared with the sector average of -0.1%. It suffered particularly acute losses in September as its bets on sterling and the oil price came back to bite.
Odey Swan and Odey Odyssey, which sit in the same sector as Odey European, saw even higher losses over the period, falling 18.5% and 32.5% respectively, with Odey Odyssey having the dishonour of being the second worst performer of the year.
Sharp reversal from bumper 2018
This marks a sharp reversal from 2018 when the fund returned 54.7% to investors.
Odey’s boutique was able to rake in 30% higher turnover of £40.8m thanks to Odey European’s bumper year which helped generate £11.9m worth of performance fees, a 3,000% increase on the previous year.
Before that Odey European had seen two years of dismal performance. The fund handed investors a 49.5% loss in 2016 as it shed close to 50% of its value after being hammered by currency swings and rising equity markets, followed by a 21.7% loss in 2017.
Hedge funds deliver best performance in a decade
Odey European’s losses come as fellow hedge funds delivered their best annual performance in a decade.
Data from Chicago-based Hedge Fund Research, cited in a Financial Times article, shows hedge funds returned 10.4% net of fees in 2019 though this was still well below the S&P 500’s gains of 31.5%.
But the sector’s turnaround was not enough to sway investors who yanked $43bn (£32.9bn) from hedge funds last year, according to HFR. Over the last four years net redemptions are close to $142bn.
The IA Targeted Absolute Return sector has similarly been one of the worst selling sectors with outflows since July 2018 totalling £7.5bn.
