Thursday, November 3, 2016

Follow-Up: "Odey Hedge-Fund Assets Dip 60% as Clients Shun ‘Bitter Pill’"

If the worst happens, it may be pertinent whether his Palladian chicken coop is on a freehold or leasehold should one wish to shoo the chickens out and take up residence.

Drawings for Crispin Odey’s “chicken house” depicted a structure with a three-sided stairway and two dozen columns. 
Drawings for Crispin Odey’s “chicken house” depicted a structure with a three-sided stairway

 and two dozen columns.
Am I being impertinent?
Or insolent.*

From Bloomberg:
Assets under management at Crispin Odey’s flagship hedge fund have plunged 60 percent this year after clients demanded their money back as his bearish bets fell apart in the wake of central-bank interventions and near-zero interest rates.

The Odey European Inc. fund held 422 million euros ($468 million) at the end of September, down from 1.1 billion euros at the start of the year, according to investor documents seen by Bloomberg News. The fund lost 37.5 percent during the period and 43 percent through Oct. 14. A spokesman for Odey Asset Management declined to comment.

“He still has a good track record and he is a contrarian,” said Laith Khalaf, senior analyst at Hargreaves Lansdown, which sells funds to individuals in Britain. “Investors do need to take that on board, though this year so far is no doubt a bitter pill to swallow.”

There’s been a widespread backlash by investors this year against poor returns and the high fees charged by money managers. A total of $60 billion has been pulled from hedge funds and cash is being moved away from big-name traders to computer-driven funds, where algorithms are employed to bet on macro-economic trends.

Rollercoaster Returns
While Odey’s company manages more than $8 billion, placing it among the largest hedge-fund firms in Europe, it’s the rollercoaster returns of his own European Inc. fund that attract attention. This year’s losses follow an almost 13 percent decline in 2015. Still, it’s up more than 900 percent since it started in June 1992, and in that time annual gains of more than 50 percent have been achieved four times.

“If you have been invested with someone like him for 10 years, you are still in the money and hope that he could recover,” said Jacob Schmidt, chief executive officer at investment advisory firm Schmidt Research Partners.....MORE
HT: ZeroHedge who pulled a nice quote from the Hargreaves analyst regarding Odey's statement that U.K. stocks could slump 80 percent:
“An 80 percent fall suggests a pretty seismic collapse in capitalism," Hargreaves Lansdown’s Khalaf said. "In that scenario, I’m not sure you’d want to be invested in anything apart from baked beans and bottled water."
The Stress May Be Getting To Hedgie Crispin Odey

*An old tale about Peter the Great's trip to England in 1698 and repeated in Prime Obsession: Bernhard Riemann and the Greatest Unsolved Problem in Mathematics:
From his British trip the following story is well known, though it is almost certainly apocryphal. Staying at John Evelyn's country house outside London, Peter marched into the drawing room one day with a shotgun over his arm and announced, in thick English, "I haff shot a peasant." "No, no, my dear fellow." replied his host, laughing. "You mean a pheasant." "Nyet," said Peter, shaking his head. "It voss a peasant. He voss insolent, unt so I shot him." 
Great story but not borne out by the facts. Pete stayed at Evelyn's home in Deptford which was handy to the naval dockyard where the Tsar went incognito to learn the tricks of the navy biz.
Not that it is impossible the writer and the Tsar visited the country place but describing it as Evelyn's is wrong and shows a certain fast-and-loose approach to the truth.
Evelyn didn't inherit the family estate from his brother until 1699 by which time Peter had returned to Russia and begun building his navy, but this story was told to me almost word-for-word the first time I was described as insolent.
So I looked it up.