Will hedge funds profit from short-selling a no-deal Brexit?
Amidst the ‘fog of war’ surrounding Brexit, one rumour that keeps swirling around is that a number of hedge fund managers who ‘directly or indirectly bankrolled Boris Johnson’s leadership campaign’ in the summer and/or donated to the Leave campaign in 2016, are set to profit handsomely from the potential chaos of a no-deal Brexit. But as Tanzeel Akhtar asks, is this really a 'hedge fund heist’ as some claim or just prudent portfolio positioning?
Crispin Odey, a London-based hedge fund manager and the founder of Odey Asset Management reportedly gave GBP870,000 to the Leave campaign and then made GBP220 million overnight as sterling slumped following the 2016 referendum result.
The morning after he told the BBC: “There’s that Italian expression – ‘Il mattino ha l’oro in bocca’ – the morning has gold in its mouth, and never has one felt so much that idea as this morning.” Since then Odey’s hedge fund lost 12.7 per cent in September, according to numbers sent to investors and reviewed by the Financial Times.