(Bloomberg) — Hedge fund manager Crispin Odey is a Brexit supporter and he’s shorting the pound. But he dismisses allegations that Prime Minister Boris Johnson’s links with investors like him amount to a conflict of interest.
“What they’re thinking is: can we show that the people who back Boris are unpatriotic, have no interest in the U.K. and basically are only there to try and make money out of the suffering of others,” Odey said by phone on Monday. “That’s what they are trying to do. The answer is it’s all crap.”
Former Chancellor of the Exchequer Philip Hammond and Boris Johnson’s sister, Rachel, have said recently that “speculators” among the prime minister’s financial backers stand to make large amounts of money from a no-deal Brexit. Treasury Minister Simon Clarke said in Parliament on Monday that there are no grounds for an investigation of the claims, which he derided as a “tinfoil-hat conspiracy.”
For all the outcry about Odey’s bets against the pound, they haven’t exactly made him or his investors rich. The short position he built up before the Brexit referendum in mid-2016 initially made about 220 million pounds ($270 million) when the currency plunged after voters backed withdrawal from the European Union. But those gains drained away in a matter of weeks as markets rallied, and he ended the year down nearly 50%.
Flagship Fund
Odey said Johnson’s opponents are trying to sully him by implying that his backers will benefit from the sort of Brexit that the prime minister has promised to deliver. “But the answer is Boris is sensible enough,” Odey said. “He doesn’t talk to me.”
This year, as Parliament battles bitterly before the Oct. 31 Brexit deadline, Odey’s still betting against the pound, and his flagship fund, Odey European Inc., is down 14.2% through Sept. 26, according to a spokesman for the firm.
What’s more, Odey has trimmed his bet against the pound to about 10% of the flagship’s total currency exposure at the end of August, according to a letter sent to investors on Monday and seen by Bloomberg. Another bet on a fall in the value of long-dated U.K. government debt was cut to 17.5% from 60% a month earlier, the letter shows.
And Odey’s not alone. Hedge funds and other large speculators trimmed their net short positions in the past two weeks, according to data from the Commodity Futures Trading Commission. Their bets against the pound in August were the most bearish since early 2017. The pound was the best-performing Group of 10 currency in September.
Argentina Wagers
Odey’s recent losses are largely the result of ill-timed bets made since mid-August. His main fund lost a fifth of its value in the month through mid-September, with most of the decline resulting from wagers gone wrong in Argentina. His firm’s biggest short bet by value, against Lancashire Holdings Ltd., also didn’t help as the stock rose this month.
When Clarke, the Treasury minister, was asked about Odey in Parliament on Monday, he declined to comment on individuals and said the government isn’t taking a position on the issue of short-selling. Investors are “entitled to hedge,” he said.
When Odey learned that his name had come up in the lawmakers’ debate, he replied: “Fame at last!”
(Updates with Odey comment in second paragraph.)
To contact the reporter on this story: Nishant Kumar in London at [email protected]
To contact the editors responsible for this story: Shelley Robinson at [email protected], Patrick Henry, Sree Vidya Bhaktavatsalam
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