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Exane to cut ties with Odey Asset Management as firm races to reassure clients

Odey Asset Management has lost another key relationship, as French brokerage Exane decided to cut ties with the hedge fund after a Financial Times investigation alleged its founder Crispin Odey had sexually assaulted or harassed 13 women. 

The hedge fund has told clients it is in “active discussions” with all of its service providers as it battles to shore up confidence in the wake of a backlash against its founder following the allegations.

Morgan Stanley is moving to distance itself from the London-based hedge fund, the FT reported on Thursday. JPMorgan and Goldman Sachs are also reviewing their prime broking relationship with the group. Prime brokers are important to hedge funds, providing them with credit to facilitate their trading.

Exane, which is owned by French bank BNP Paribas, provides institutional investors with a range of services, including equity research and deal execution. The business emailed Odey Asset Management last night, informing the fund manager it was terminating the relationship, according to people with knowledge of the development.

Exane declined to comment. Odey Asset Management did not immediately respond to a request seeking comment on Exane.

Odey Asset Management’s chief executive Peter Martin said in a statement to clients on Thursday that he was “confident that our service providers will continue to work with us to ensure that the interests of investors are protected”.

The attempt to reassure clients comes as the firm faces a widening probe by the UK’s Financial Conduct Authority, which opened an investigation two years ago into potential “non-financial misconduct” at the company.

The inquiry later shifted to focus on corporate governance issues, after Odey fired his executive committee in late 2021 when it attempted to discipline him for breaking a “final written warning” barring him from behaving inappropriately with female staff.

The FCA’s probe may now be widened to investigate new allegations against Odey reported in the FT, which revealed that 13 women alleged they had been sexually harassed or assaulted by him over the past 25 years. Two of the incidents occurred in 2021, after Odey was acquitted of a sexual assault charge brought against him by a female banker in relation to an encounter in 1998. A law firm representing Odey said the allegations were “strenuously disputed”.

In the statement to clients, Martin said that the “various allegations” were being “looked into” by the firm’s lawyers and that it “treats, now and in the past, all such allegations extremely seriously”.

Crispin Odey on Thursday told Reuters that Morgan Stanley’s move was “a massively quick reaction to an allegation by the FT”, adding that “none of the allegations have been stood up in a courtroom or an investigation”.

The FCA said it could not comment on individuals or specific firms, adding: “However, we take allegations of non-financial misconduct seriously and expect firms to have adequate governance procedures in place that ensures allegations of misconduct are properly investigated.”

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