How to get a job at hedge fund Odey Asset Management
In purely financial terms, things are looking up for Odey Asset Management. The hedge fund, which has long been bearish on sterling and the British economy, was up 140% in the year to September 14th, largely by virtue of what Bloomberg describes as 'highly leveraged short wagers on long-dated government bonds.' Yesterday, it was up 145% in the year. Shorting the pound and gilts has "been helpful," Crispin Odey, the fund's founder, told the Financial Times, adding that his sterling bets are not leveraged and had been bigger in the past.
Odey Asset Management's success is likely to be reflected in the fund's next compensation round. Last year, the fund achieved returns of 54%. In the year to April 2021, its highest paid partner (likely Crispin Odey himself) earned £15.6m, the average of its 16 partners earned £2.5m, and the average of its 29 employees earned £309k. This year's pay will presumably be substantially higher.
While Odey is being broadly vilified for betting against the British economy, this year's outsize returns come after years of pain. 2021 marked Odey Asset Management's best performance since 2007, and the fund lost half its value between 2015 and 2020. Between 2020 and 2021, headcount at the fund shrunk from 42 to 29 people in an attempt to cut costs. Around the nadir in 2020, the average employee was paid £160k and the average partner earned £635k (which arguably still wasn't bad given the extent of the losses).
As times improve for Odey, if not for the UK as a whole, the fund might be expected to hire again. In the year to April 2021, it added three partners even while cutting four investment managers and seven administrators. However, getting a job at Odey isn't necessarily that easy. Headhunters say the fund is pretty cliquey and likes a certain sort of person.
That sort of person is indicated by the 24 people currently listed as working for Odey Asset Management under the FCA Register. Only one is a woman, and many have aristocratic connections.
Odey's only registered female employee is Sophia Juliet Whitbread, daughter of Hugh William Whitbread of Sussex, who runs its emerging markets strategy. Other registered employees include Mathieu Poitrat Rachmaninoff and Henry Robert Fitzroy John Worcester, the Marquess of Worcester. Being a member of the British peerage clearly helps. So does attending an elite school like Gordonstoun, the Scottish boarding school that once housed King Charles III. Kwasi Alfred Addo Kwarteng himself joined Odey as an analyst after a spell at JPMorgan Cazenove and an education at Eton and Cambridge University.
If you're not endowed with the correct connections or education, all is not lost. Odey also employs various people who previously worked for Newton Investment Management (including Whitbread). And he is not averse to hiring scrappy upstarts with vocal opinions. The most famous of these was 29 year-old Hugh Hendry, the founder of now defunct Eclectica Asset Management, whom Odey hired in 1999 after apparently informing him, "I think you are like us. You are one of the pirates, and I’d like you to join my ship.” Other hires in this vein include Bruce Hubbard, once known as Citi's "most outspoken researcher", who joined Odey after being fired from Citi on bonus day 2012.
Given Odey's approach to investing, the key criteria for joining the fund is likely to be an enduring bearishness on the British economy. Many of those who join stay for years. Those who leave continue to articulate skepticism about the UK years after their exit. “Buying sterling here is like licking honey from the razor’s edge,” Hendry told the FT today. “It would be remiss of the foreign exchange community not to allow for [sterling] to trade back at parity with the dollar and possibly trade below that level in the short term.”
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