Odey European knocks out competition with 38.28% YTD

LONDON: After suffering three years of stagnant asset growth and mediocre returns, Crispin Odey’s European long/short fund, Odey European, which has $855m in assets under management, has out-performed its peer group with a year-to-date return of 38.28% at the end of September.

It returned 1.95% (EUR) in August against the MSCI Europe’s -0.69% and 7.39% (EUR) in September when the MSCI Europe returned 0.64%. The fund – which invests in European securities, bonds and currencies and related financial instruments and non-European securities – has sidestepped the likes of Marshal Wace’s European Tops Strategies and RAB Capitals’s Europe fund.

Meanwhile, the Thames River Kingsway Fund has so far only returned 1.38% for the year and the giant SVM Highlander Fund, with close to $11bn in assets under management, reported a YTD return of 24.43% through the middle of October

“While we have not lost money, we have had three years of mediocre performance,” said David Helm, partner and head of sales and marketing at Odey.

The fund returned a lacklustre 0.02% in 2004, managed 7% in 2005 and fell to a negative 1.44%, in 2006, according to figures from Barclay Group. But this year’s returns look like it could come close to eclipsing its stellar performance of the early and mid- 90s. The fund delivered its best returns in its first year of operation with a staggering 60.42% (EUR) in 1993. In 1996 and 1997 it returned 53.87% (EUR) and 51.76% (EUR) respectively.

Gains from Odey’s short equity book and commodity bets were instrumental in fuelling contributions to Odey Europe’s third-quarter performance.

“During Q3 our long/short fund returned 11.2%; our short equities returned 10.9%; while our longs, in line with the long-only funds, returned -0.6%. We lost a bit of money on bonds, -2.4%; gained 1.5% on currency and did well with our wheat and, indeed, with our gold and our oil, making 4.4% on the commodities,” Crispin Odey told investors in a recent conference call.

Capitalising on its spectacular rebound, Odey is currently aggressively raising new capital for the fund.

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