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Screenshot of a breaking news alert e-mail from Q2 2017
Investment management firm Odey Asset Management, which oversees nearly $8 billion in assets and is the largest shareholder in Retail Forex and CFD broker Plus500 Ltd (LON:PLUS), apparently had a disastrous 2016.
Bloomberg is reporting that Odey disclosed in an investor letter that its main hedge fund lost 49.5% of its value in 2016, thanks to incorrect bearish bets pushed by Odey founder Crispin Odey (pictured above) throughout the year.
The losses were made despite at least one very big correct call. Mr. Odey was a big backer of Brexit, and he put his money where his mouth was on the issue taking large negative bets on both UK equities and the British Pound, netting Odey a £220 million Brexit-related gain.
However Mr. Odey’s bets that the bad times would continue for UK and European equities turned out to be wrong. The FTSE 100 went on a 20% post-Brexit vote tear through to the end of the year, ending 2016 at all-time high levels.
Odey is the largest shareholder in Plus500, building its stake in the broker to above 23% in December after Plus500 shares were hit by new FCA rules aimed at curbing leverage which retail traders can use in trading CFDs. Overall in 2016, Plus500 shares were down 8%. Odey’s stake in Plus500 is currently worth about £106 million (USD $132 million). More than half of Odey’s stake in Plus500 is held in its Odey Absolute Return Fund, and the remainder in several other company funds.