THE scandal-hit hedge fund set up by Crispin Odey is being broken up as it confirmed talks to transfer some of its funds to rival firms amid an intensifying crisis following sexual misconduct allegations against its founder.

Odey Asset Management (OAM) said in a letter to clients that it was “in advanced discussions” to offload some of its activities and staff to other asset managers.

OAM is known for highly leveraged bets on global equities, debt, currencies and commodities. Besides OAM, the group also runs Brook Asset Management and Odey Wealth.

It is reportedly affecting the majority of its 4.4 billion US dollars (£5.3bn) in assets under management.

It comes as the group has been battling to contain the fallout after the Financial Times published a series of allegations of sexual harassment or misconduct against Odey, which he denies.

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Allegations have been made against Odey in the past. In 2021 he was found not guilty in a court case where he was accused of an indecent assault which had allegedly happened in 1998.

Odey, 64, founded the asset management firm which bears his name in 1991.

Former British Chancellor Kwasi Kwarteng was once an adviser to OAM and Odey was a leading backer of Brexit and a donor to the Conservative Party.

OAM has since broken some of its ties with Odey, saying on Saturday that he will “no longer have any economic or personal involvement in the partnership”.

It also announced plans to rebrand the partnership, which will see Odey’s name removed from the hedge fund.

But the crisis has already led to customers rushing to remove their money from the funds that Odey manages and companies that provide vital services to OAM have moved to sever ties.

OAM had already moved to halt withdrawals from two of its funds and closed another amid the investor exodus, while it emerged that JP Morgan Chase had given notice to end its relationship with the firm, following the lead of Morgan Stanley, Goldman Sachs and Exane last week.

In a letter sent to investors on Wednesday, OAM said: “We have been, and remain, in constructive dialogue with our service providers and key counterparties.

“It has, however, become clear that some investment management activities of the partnership are affected by recent events.

“Given that, the firm is now in advanced discussions for rehousing funds and transferring certain fund management activities and individuals to other asset managers.

“Any sale or rehousing is considered subject, of course, to any relevant regulatory approvals and due diligence, with a view to an orderly transition of any assets and investors.

“The fund boards and managers are also appraised and supportive of this approach.”

The business added: “Acting in the best interest of our investors and our staff has continued to be our primary concern over the past few days.”

Odey has denied the allegations published in the FT last week, telling the paper they are “rubbish”.

The newspaper – together with Tortoise Media – said last week that it had spoken to 13 women who claimed they were abused or harassed by the 64-year-old fund manager.

The alleged incidents happened between 1998 and 2021 and involved women who had either worked for Odey Asset Management or had professional dealings with Odey.

It was not the first time that people had made claims about Odey’s behaviour.

In 2021 he was found not guilty in a court case in which he was accused of an indecent assault which allegedly happened in 1998.

The Treasury committee is set to quiz the UK’s financial regulator over how it has handled allegations of sexual misconduct against Odey and what action it has taken, with the Financial Conduct Authority (FCA) reported to have been privately investigating the business prior to the FT’s report.

The watchdog was reportedly given a report of Odey’s conduct in early 2021 after the firm took disciplinary action against him and has been asked by the committee to confirm if this is true.