Odey Said to Surge 9% as Bearish Hedge Funds Win on China

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Crispin Odey
Crispin Odey, founding partner and portfolio manager at Odey Asset Management LLP. Source: Odey Asset Management LLP via Bloomberg

Crispin Odey’s main hedge fund surged about 9 percent this month by betting against China after losing money on the wager earlier in the year, according to a person with knowledge of the matter.

The gain by Odey European, a $3.2 billion strategy that bets on rises and falls in stocks, pared its loss for the year to an estimated 5 percent as of Monday, the person said, asking not to be identified because the information is private.

Odey, 56, is among hedge fund managers profiting from the slump in China, which saw European stocks post the biggest losses since the financial crisis on Monday as the rout spread. His London-based firm, which manages $12.8 billion, told investors in a letter last month that a devaluation in China would mean deflation breaking out across the world.

Odey European’s bets on China had led to a record 19 percent loss in April. It was “attacked on all sides” after wagering China’s economic troubles would cause a slowdown that could embroil the developed world, it told investors.

Omni Macro Fund, managed by Stephen Rosen, is another hedge fund racking up profits. The fund, which manages more than $500 million, climbed 4.9 percent in the month through Aug. 21, a spokesman for the company said via e-mail. Its strategies include betting on the slowdown in China, over-valuation of global equities and a bearish view on commodities via copper futures, he said.

China’s stocks extended the steepest five-day drop since 1996 in volatile trading on Wednesday, as a rate cut failed to halt a $5 trillion rout.

The slump in global equities has resulted in many hedge funds nursing losses. The industry fell 2.3 percent this month through Aug. 21 and 1.1 percent this year, according to the HFRX Global Hedge Fund Index.

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