Odey ‘satisfied’ as profits and headcount shrink

Fund outflows see Crispin Odey’s paycheck fall over 70%

Odey's shrinking fund takes big bet on UK debt

Crispin Odey has seen operating profits more than halve at both Odey Asset Management and Odey Wealth Management as both businesses cut staff numbers, but group company results reveal directors are satisfied with the latest financial results.

Operating profit at the asset management business for the year to 5 April 2018 tumbled to £8.8m compared to £18.7m in the previous financial results, according to Companies House accounts published on 27 December 2018.

The asset management business is a partnership controlled by Odey Asset Management Group Limited, which also is the parent company to Odey Wealth Management. All three entities, of which Odey is the ultimate controlling party, published company accounts over the Christmas period.

The group’s wealth management business also took a hit with sales falling from £4.1m in 2017 to £2.7m in the latest financial results, also to the period ended 5 April 2018. Operating profit more than halved from £1.1m to £487,000.

Odey funds suffer outflows

Total assets under management for the fund house were $5bn compared to $6.1bn in 2017, resulting in management fees falling from £44.2m in the 2017 reporting period to £29.3m in 2018. However, performance fees more than sextupled to £385,000 from £60,000 in 2017.

The European fund, managed by Odey, fell 49.5% in 2016 and 21.7% in 2017 leading to clients pulling money. However, several of Odey Asset Management’s funds leaped to the top of performance tables for the alternatives sector in the first half of 2018 with Odey Giano European delivering 16.57% in the period to July and Odey Swan returning 15.26%.

In October 2017, the firm told clients that between January 2015 and August 2017 its total assets under management had fallen from $11.7bn to $6bn and then shed a further £500m in the following month.

Satisfied with performance

In the parent company’s results, published on 19 December 2018, director Orlando Montagu described the parent company’s results as satisfactory and said falls in revenue were in line with expectations to outflows.

He noted the Odey European Absolute Return and European Allegra funds closed in April 2017 but added that the partnership had taken on two segregated mandates in August and December 2017.

The partnership’s investments in its own funds fell to £731,000 in the financial year down from £1.8m. It holds a further £1.1m in private company investments in TCAM Asset Management, Latitude IM and PE Advisors, unchanged from the previous financial year. Fair value was derived at cost less impairment for the period.

Investment staff among falling headcount

The parent company results revealed staff headcount dropped from 104 in the 2017 financial year to 67 in 2018. That included a reduction in investment management staff from 43 to 38 staff. Administration headcount more than halved from 51 to 22 over the period.

Total employee wages and salaries for the group fell from £13.7m in 2017 to £10.6m in 2018 for the company.

At the LLP, investment management staff fell from 31 to 23 while total staff fell from 69 to 52. Total members remuneration fell from £18.7m to £8.8m, while Odey, the member with the largest entitlement, saw his pay fall from £5.5m to £1.5m.

In the wealth management business, staff costs reduced over the period from £1,415,000 to £1,381,000 with headcount reducing from 14 to 11, entirely through a reduction in administrative staff. The sole director saw their salary reduce from £467,000 to £353,000.

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