Crispin Odey Sharply Narrows 2015 Losses on Correct China Calls

Aug 25 2015 | 7:19pm ET

Longtime China bear Crispin Odey’s main hedge fund has gained approximately 9% so far in August by maintaining its bets against China.

The well-known European money manager came under pressure earlier this year as his pessimism on China seemed to be misplaced, according to a Bloomberg article citing unnamed sources. The firm’s $3.2 billion flagship Odey European Fund lost more than 19% in April alone on wrong-sided wagers on China, emerging markets, oil prices and European credit markets. 

The fund has reportedly pared its year-to-date loss to 5% as of Monday, noted Bloomberg. The recovery has been driven by positions that benefit from Chinese and China-dependent markets and currencies such as Australia. 

Odey has long been wary of China. In a classic example of being early, not wrong, he went on record in July as predicting devaluation in China’s currency would risk deflation around the world and that Chinese economic problems could envelope markets everywhere. 

In an effort to stem staggering losses in its stock markets, China’s central bank earlier today cut interest rates and lowered capital ratio requirements at banks, among other measures.

Hedge funds have been caught up in the volatility. For the month through Aug. 21, hedge funds are down 2.3%, according to Hedge Fund Research.

Founded in 1991, Odey Asset Management manages an aggregate $12.8 billion.


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