Odey Asset Management is raising money for a new hedge fund — sort of.
The London firm has launched the Odey Absolute Return Focus Feeder Fund, a long-short fund that is a new structure of an existing fund that has been around for six years. The Odey Absolute Return Focus Feeder Fund is a hedge fund version of Odey Absolute Return, an existing Ucits fund that has been closed since 2013 and hasn’t been marketed for three years.
Unlike Ucits funds, the Odey Absolute Return Focus Feeder Fund, launched in December with a small amount of capital, is being marketed to U.S. investors.
Both funds are headed by James Hanbury, a partner in Odey, which he joined in 2008 to launch the firm’s UK strategy.
He is the sole decision maker for the fund, overseeing a team of three others.
The new offering has a minimum investment of $1 million. It will deploy the same strategy as the Ucits version, an equity long-short fund that takes a bottom-up approach to its investment decision process. The big difference is that the new offering will be able to be more concentrated.
The two portfolios generally use a macro component as a risk management tool and usually maintain a net long exposure ranging between 30 percent and 60 percent. Hanbury likes to take a 5 percent position in his favorite stocks if he sees a potential 50 percent upside, but depending on the risk, the position can be larger or smaller. The fund’s regional exposure is equally divided among stocks in the U.S., Europe and the UK.
The Ucits fund’s top five holdings underscore its wide-ranging strategy and ability to find companies off the beaten path. They are Plus500, an Israel-based retail foreign exchange trading company; Regus, a Luxembourg shared-office provider; Serco, a UK company that provides public services in a wide variety of countries; Amaya, a Canadian company that provides technology services for the global gaming industry; and Seattle-based online retail giant Amazon.com.
The Ucits version, which has $1.5 billion under management, has compounded at 19 percent since inception. This performance was driven by 36 percent and 45 percent gains in 2012 and 2013, respectively. The fund also was able to post a 3 percent gain in 2011, when European stocks took a big hit, and a 7 percent gain in 2015, when the global stock markets straddled break-even, give or take a percentage point or two.
Odey Asset Management is best known for its Odey European fund, headed by firm founder Crispin Odey. It has distinguished itself for going net short a few years ago.
But it has struggled of late. The fund, now 40 percent net short, fell 13 percent last year and was off more than 4 percent in the first two months of 2016. It is said to have extended those losses already this month.
