Odey Takes on Short-Sellers in Hedge Fund Battle Over Plus500Richard Partington and Will Wainewright
Crispin Odey, who runs $13.2 billion hedge fund Odey Asset Management, sees something in Israeli trading firm Plus500 Ltd. others don’t.
The money manager, based in London, bought about 2.5 million shares in Plus500 on Friday, bringing its stake to about 19 percent, according to a regulatory filing on Tuesday. That makes Odey the largest shareholder, surpassing co-founder Alon Gonen, according to data compiled by Bloomberg.
Plus500 surged as much as 25 percent in London after losing more than two-thirds of its value last week. Investors had dumped the stock after it froze some customer trading accounts as part of a Financial Conduct Authority review into anti-money-laundering controls. Valiant Capital Management and Ennismore Fund Management have been shorting Plus500, while Gotham City Research, run by New York short-seller Daniel Yu, said it’s “wary” of the company.
Odey’s strategy of adding to the stake twice in a week when others fled underscores his investment style, making big bets against the grain. Wagers against banks including HBOS Plc helped Odey’s main fund to a 57 percent gain in 2007, a year in which Britain’s biggest mortgage lender slumped 35 percent.
Odey’s top fund, which makes long and short bets on equities globally, posted a more modest rise of 5.5 percent in 2014, according to a letter it sent investors. It ended the year in the black thanks to an 11.7 percent gain in December.
The world has entered an economic slowdown that will “devastate” equity markets, Odey warned investors earlier this year. “We are really at a dangerous point,” he said, predicting central bankers would be unable to avert a damaging downturn.
“It is inconceivable that a man as seasoned and experienced in investing as Crispin Odey would not have done thorough and diligent research,” Titan Investment Partners, a fund manager with a long position in derivatives on London-based Plus500, wrote on its website. “Either the stock is an outright fraud and the bear case is intact, or the bears do not understand the industry that Plus500 operates in and this is a monumental buying opportunity.”
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