Barclays seeks to terminate relationship as corporate bank of Ode Asset Management

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People familiar with the situation told the Financial Times that Barclays is considering ending its corporate banking relationship with Oday Asset Management, adding further pressure to the hedge fund as it grapples with sexual misconduct allegations against its named founder. The latter is struggling to stay afloat.

Following the FT’s report last month that 13 women had accused Crispin O’Day of sexual assault or harassment, a series of banks served termination notices on O’Day Asset Management for the prime broking and custody relationships needed to run the hedge fund.

Those notices remain in place, despite O’Day being fired within days of the allegations being published. The 64-year-old hedge fund founder was previously acquitted of indecent assault and vehemently denies the latest sexual misconduct claims.

ODE Asset Management, which oversaw roughly $4.4 billion in investments before the allegations emerged, announced last week that two of its star managers were in advanced talks to move their funds and that other deals were under discussion. Was staying

Three people familiar with the situation told the FT that Barclays, Oday Asset Management’s corporate bank, has become the latest bank to pledge to end its relationship with the hedge fund, following JP Morgan, Goldman Sachs and Morgan Stanley. Have already severed ties with 32. -year old firm.

Two of the people said the bank has told the Financial Conduct Authority it wants to separate itself from Oday Asset Management. One of them said the process would have to be carefully managed as Barclays manages ODE Asset Management’s processes like payroll, which it cannot easily walk away from.

Oday Asset Management declined to comment on whether the hedge fund had been informed of Barclays’ intentions, and whether it could continue trading in the long term without a corporate banking partner. Barclays declined to comment on its relationship with the hedge fund.

While ODE Asset Management has told clients it is attempting to sell some funds due to the impact of “recent events,” it has not publicly said it is closing its business.

A person familiar with the regulatory situation told the FT that the hedge fund winddown, which could take several months, could be implemented without making any changes to their registration status. If a company becomes insolvent, a formal process will begin, including the possible appointment of a special administrator.

As well as losing its core banking partners and star fund managers and having several funds suspended, Oday Asset Management remains the subject of a two-year-old investigation by the FCA over corporate governance and other issues.

That investigation could continue even if Ode Asset Management closed, although any recourse on the part of the FCA would be limited to publishing adverse findings and censuring anyone found to have failed in their duties.

The FCA has set precedent in bringing findings against individuals who are no longer active in the financial services industry, including a 2014 ban. Jonathan Paul BurrowsS, who had already stepped down as managing director at BlackRock Asset Management after he was indicted for serial evasion in payment of his train fares.

The FCA has not publicly commented on or confirmed the ODE Asset Management probe, but has been asked to explain its dealings with the firm at a Treasury Select Committee hearing later this month.

Harriet Baldwin, President of TSC, Said The FCA would like to hear from him on the “nature and intensity” of his oversight of O’Day Asset Management over the past five years, including how the regulator handled any concerns flagged about Crispin O’Day.

Additional reporting by Jane Croft