Odey on the rise as alternatives sector stumbles

Crispin Odey’s investment firm has generated some of the best returns in the alternative Ucits space, as the sector struggles to cope with higher volatility and a stronger dollar in H1.

Odey's shrinking fund takes big bet on UK debt

The Odey Giano European and Odey Swan funds snagged the top and second top spots in alternative Ucits year-to-date performance data published by Kepler in July. The funds have returned 16.57% and 15.26% year-to-date respectively.

Furthermore, the £752m Odey Absolute Return fund, run by James Hanbury and Jamie Grimston, slid into fifth spot, returning 9.99% over the period.

Top 10 Alternatives UcitsReturn ytd 2018
Odey Giano European16.57%
Odey Swan15.26%
GAM Star Alpha Technology12.15%
Montlake AlphaQuest Ucits10.47%
Odey Absolute Return9.99%
RWC Pensato Europa Absolute Return8.81%
H2O MultiReturns7.69%
UBS Global Equity Long-Short Fund7.26%
Schroder GAIA Contour Tech Equity7.09%
Jupiter International Financials6.83%
Source: Kepler Partners

On a monthly view, Odey Swan was the second strongest performer in June, delivering 4.41%. The top spot went to Natixis H20 MultiReturns, which returned 4.83%.

Odey rebounds

The news comes as Odey’s long-only European fund finally reaps returns from its bearish bets on equities and long-dated UK government debt.

The €173m fund, which is run by the Brexit-backing billionaire, has gained 20% year-to-date, reversing several years of terrible performance.

Odey’s fund fell 49.5% in 2016 and 21.7% last year. Between January 2015 and August 2017, the fund shrunk in size from €2.5bn to €184m and saw total assets under management fall from $11.7bn to $6bn.

Performance laggards

Odey’s funds were a bright spot in an otherwise period of poor performance for funds in the alternatives sector.

Kepler’s Absolute Hedge Global Index is down -0.92% year-to-date. Antecedo Independent Invest has been the worst performer so far this year, with returns down -21.02%.

Bottom 10 Alternatives UcitsReturns ytd 2018
Antecedo Independent Invest-21.02%
City Financial Absolute Equity-16.84%
Nordea 1 – Heracles Long/Short MI Fund-13.36%
Garraway Financial Trends-12.52%
MLIS AQR Global Relative Value UCITS-12.13%
Gateway Systematic Alpha UCITS-10.74%
R Karya Macro Fund-10.05%
R CFM Diversified-9.91%
Fulcrum Multi Asset Trend Fund-9.76%
ChinaAMC China Growth Fund-9.39%
Source: Kepler Partners

The worst performer in June was the DB Platinum IV Clinton Equity Strategies, followed by the Henderson Horizon China fund, which returned -6.49% and -5.70% respectively.

Peter Sleep senior portfolio manager at Seven Investment Management said funds that are long equities and bonds will have found it tough as neither asset class have been performing well this year.

He added the translational effects of a stronger dollar could have hit some funds.

The dollar-denominated Fulcrum Multi Asset Trend Fund, for example, is down -10.33% in USD but is down -13.39% in sterling.

However, some of the weakest performers, like the £224m City Financial Absolute Equity fund, are sterling denominated.

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