Oc Funds Management

Investment Philosophy

“To be a successful long term investor you must think like an owner – know when to take risk and when to preserve capital.
I launched Odey Asset Management in 1991 with this ‘owners’ approach and have worked hard to build an investment team and a client base who share these beliefs. Today we manage $12.2bn for many of the world’s leading investors and have an exceptional performance record across our conventional and hedge fund portfolios.”
Crispin Odey, Founder


Investment Process

Odey maintains a very pragmatic approach to investment, reacting to changes in market conditions when necessary, but ever mindful of focusing on absolute returns and capital preservation.
In general, Odey believe most investors are averse to risk and overprice earnings visibility and certainty. In contrast, Odey understand and embrace risk; they look for situations where risk premia are inappropriately allocated and future earnings are mispriced. The team generates alpha in two main ways: (i) using macroeconomic and industry themes, and (ii) special situations.
Odey encourages a continuous and vibrant debate about the macroeconomic outlook. At their regular investment strategy meetings, they set out a picture of key economic outcomes, concentrating on areas where the market disagrees with, and is mispricing, their expectations. This extensive top-down analysis allows Odey to identify a number of macroeconomic themes, and more specifically a universe of stocks that fit within those themes.
To this universe, Odey applies fundamental, bottom-up stock-by-stock analysis, with the ultimate aim of finding out-of-favour but fundamentally strong companies where they and management share a vision for recovery, and where an outcome has not been priced in by consensus. Odey invests with conviction and seeks to benefit from both improving fundamentals and improving sentiment.
Odey’s heavy reliance on the firm’s macroeconomic and fundamental research capabilities provides them with the confidence to invest in the early stages of a recovery and often against consensus. In doing so, Crispin is able to leverage his own stock picking skills with the extensive experience and expertise of 35-strong team of portfolio managers and.analysts.
In summary this is a research-intensive strategy that hinges on Odey’s original macroeconomic and fundamental research. It manages both risk and return for clients and, over the long term, has provided clients with uncorrelated portfolios and strong returns. Crispin’s approach has served him well for thirty years as we have found that whatever the economic conditions, there are always corners of the market where a change at the enterprise or sector level can return a sector to favour and generate attractive returns for investors.

Portfolio Construction and Risk Control

Odey’s in-house economic and industrial research identifies situations of potential change where the risk/return asymmetry is highly favourable. This independent research supports their portfolio managers in holding positions in the early stages of a recovery and often against market consensus. Odey’s analysis allows them to build high conviction positions in companies they like and to construct focused, ‘best ideas’ portfolios with a high active share.
Risk control is very important to Odey and they are ever mindful of preserving capital, not least because their portfolio managers invest alongside their clients. Continuous monitoring of investments as events unfold guide their level of portfolio commitment and their pragmatic approach allows them to act quickly should the investment case alter. More formally, Odey’s six-man risk team monitors liquidity, momentum, volatility and position sizes.