Money managers under the microscope
Big-hitters Crispin Odey and Anthony Bolton may have pointed to the start of a new bull market, but not all hedge fund managers are convinced.
A report from Credit Suisse/Tremont, published today, says many managers played it safe in April, meaning funds made an average gain of just 1.68 percent, compared with a 9.57 percent rally in the S&P 500.
Even equity long/short, which some commentators accused of having too much of a long bias and therefore getting caught in last year’s market slump, made only 2.54 percent.
“Many kept a cautious stance with regard to going long the markets in light of latent market challenges and financial shocks that many anticipate may still be in the making,” the report said.
There’s nothing like backing up your stock market calls with a nice healthy profit, and Crispin Odey has done just that, revealing a 27.74 percent return in April from his European fund.
Having last month said the rally in equities could turn into a new bull market and having recently tucked away a few banks into his portfolio (after last year making money shorting banks), Odey has profited from the astonishing recovery over the past two months in Barclays shares, which alone accounted for nearly half the fund’s return last month.
It would appear that where to live is the hot topic for hedge fund managers at the moment.
Star manager Crispin Odey of Odey Asset Management is “seriously considering leaving” the UK over higher taxes, the Sunday Times reported, while Krom River moved to Zug from London for lower tax and a better lifestyle, the Financial Times reported last year.
Disgruntled London-based hedge fund managers annoyed by the prospect of tougher EU rules and higher income tax shouldn’t pack their bags and fly to Geneva just yet, according to law firm Katten Muchin Rosenman Cornish.
At a breakfast briefing at London’s plush Capital Club this morning, legal experts said further details and amendments to the European Commission’s draft directive last month were likely, but said it was too early to decide to relocate.
So Odey Asset Management isn’t going to be leaving the UK after all.
Nevertheless, the Sunday Times interview with Crispin Odey reflects the frustration many in the hedge fund industry feel from a combination of higher taxes and what they perceive as the UK’s failure to protect them from tougher EU rules, driven by the French and Germans.
The reported return of John Duffield to fund management has generated plenty of column inches but will have raised few eyebrows among those within London’s fund management community.
Having founded Jupiter Asset Management in the mid-1980s and sold it to Commerzbank, and then set up New Star Asset Management in 2000 before seeing its share price collapse and it sold to Henderson, it was always unlikely the industrious Duffield would walk away from the industry.
By Simon Falush
So you thought safe-haven pharmaceuticals and food producers were a safe place to shelter your assets?
Think again, says Crispin Odey, the well-known hedge fund manager who thrives on a contrarian approach to equity investing. He tells Reuters that defensives could be the next target for short sellers.
Shorting UK banks, it seems, is so last year.
Having profited from the implosion of the sector in 2008, many funds believe prices have fallen far enough, and in some cases are actually looking good value.
Outspoken star fund manager Crispin Odey this week revealed he’s now buying UK banks, having made money shorting them last year.