Odey Asset Management Did Not have a Fun MayVW Staff
Odey Asset Management is an alternative investment firm based in the United Kingdom. The firm, started by Crispin Odey in 1991, has over $7 billion under management. George Soros was one of the earliest investors in the firm.
The firm rose to fame in 2008, by shorting British banks and returning over 55%. Recently, we wrote about Odey’s Oddessey fund, which was down 9% in May.
Sources with direct knowledge of the matter also provided some insights on Odey’s UK Absolute Return Fund, and Odey’s Continental European Fund.
Odey’s UK Absolute Return Fund was established in May 2009. It is benchmarked to LIBOR 3M and FTSE All Share Index. As on 31st May 2012 total fund size was £257.21 million. In May 2012 fund had 3 year of -3.47% returns against -6.80% for FTSE All Share Index. Asset Allocation as on 31st may 2012 was Long Equity Exposure 130.8% of NAV, Short Equity exposure -71.7% and Bond exposure -68.6% of NAV.It has around 78% of its currency exposure in GBP and 20% in USD.
Its CAGR since inception is 17.67% compared versus 10.58% for the index. Its year to date returns is 13.15% compared to -1.43 of the index. The month of May has not been a great one.
The Fund had short positions in Government bonds which contributed to-2.31% of the loss. The shorts included German bunds, ten year US treasuries. The media reported last month that John Paulson was shorting German Bunds We did not find it in any of the sources they quoted. However, if Paulson has a large position in bunds, he is likely losing money as they are currently yielding zero.
The fund’s equity short book had solid performance, helped by a short bias in the mining related sector and a short in JC Decaux and Sky Deutschland. Recent positions include long holdings in Dell, Hargreaves Services, and Tullett Prebon (newest addition to the fund).
Odey’s Continental European Fund was established in April 1997. As on 31st may 2012. assets under management was £197.25 million. In May 2012, the fund was down by 5.7%. Negative performance was primarily due to sectors such as Finance (-1.7%), Consumer Durables (-1.2%) and Electronic Technologies (-1.1%). The fund manager expresses concerns over Europe and slow Chinese growth.
The continental fund has been a consistent out-performer since inception. Its CAGR since inception has been 11.1% against 4.6% for the index. Comparatively fund fared better than MSCI TR Net Europe Ex UK which was down 7.9%.
The Contential fund is diversified across many industries. However, it is worth noting is that it has a 40% exposure to Euro currency. Additionally, the Fund has 99.7% exposure to equities.