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Brexiteer Odey Renews Hedge Fund’s Reviled Bet on Pound Plunging
LONDON (Capital Markets in Africa) – Hedge fund manager Crispin Odey, an advocate of Brexit, renewed his hotly debated wager against the British pound as U.K. lawmakers’ failure to agree on the divorce terms heightened concerns the country may crash out of the European Union without a deal.
He soured again on the sterling’s prospects last month, betting that the currency will fall further in the event of a no-deal Brexit, Odey said in an interview Monday. The 180-degree move came just weeks after he had unwound his long-running short position, in anticipation of the U.K. canceling or postponing its proposed exit and the pound bouncing back to $1.32 against the dollar.
Brexiteer Crispin Odey has renewed his hotly debated wager against the pound. Bloomberg’s Nishant Kumar reports.
Odey is likely to face fresh outrage on social media as some see the trade as an attempt by the London-based money manager to profit from the U.K.’s economic woes after having pushed the country toward an uncertain future. He made about 220 million pounds ($284 million) in a day when the British currency slumped following the June 2016 decision to leave the European Union, though he lost that money within weeks as markets rallied.
A split in the U.K.’s opposition Labour Party — with seven politicians quitting on Monday in protest against Jeremy Corbyn’s leadership — will likely weigh on the pound as it increases political uncertainty, according to Mizuho International. Meanwhile, Prime Minister Theresa May is leading a last-ditch diplomatic drive to persuade EU leaders to save her Brexit agreement as she faces a rebellion from Cabinet ministers who want to stop the U.K. leaving without a deal.
Business leaders, increasingly anxious about the chaos that would ensue from a no-deal Brexit, are putting into place contingency plans across the board. A top fundraiser for the Leave campaign, Odey has previously said that Theresa May got “completely mowed down” in her negotiations with the EU.
Odey’s flagship European Inc. hedge fund bet about 14 percent of its assets on a decline in the currency at the end of January, according to an investor letter seen by Bloomberg. The fund previously had the equivalent of as much as 130 percent of its assets in a short against the currency.
Source: Bloomberg Business News