A brutal start to 2016 for Crispin Odey, the outspoken British investor, has wiped out almost half a decade of trading profits in his flagship hedge fund in less than four months.
The value of the €729m Odey European Fund has now fallen 31.1 per cent to the middle of April, dragging it back to its lowest level since January 2012. His large bets against currencies and equities have gone awry, making his stockpicking fund one of the worst performers among large vehicles this year.
Mr Odey, who has been among the most prominent British financiers to back the country voting to leave the EU, has held strongly bearish views on emerging markets and China for more than a year.
In a letter to investors dated March 31, Mr Odey wrote that years of ultra-low interest rates had resulted in a wave of misallocation of capital spending and investment across the world. He believes that continued quantitative easing will result in a grand reckoning for the global economy.
“QE is merely encouraging misdirected investment,” Mr Odey wrote. “Remember it was Keynes, the architect of [central bank] thinking, who said, ‘It is good for people to travel, goods to travel but not for savings to travel.’ The disconnect between travelling and arriving may be coming home to roost. It will make the retreat from Moscow appear painless.”
The latest fall comes after his fund lost 19 per cent of its value in April 2015 while speculating on the value of the Australian dollar. That loss meant that Odey European ended 2015 down by 12.8 per cent, one of the worst performances among large hedge funds in the world that year.