Crispin Odey’s hedge fund makes 50% bet on bonds Business

Yields for one of Crispin Odey’s funds soared after his short bet on government bonds paid off.

The financier’s Odey European Inc hedge fund jumped around 15% in March after shorting government bonds maturing in 2050 and 2061.

The short bet took the fund’s return to 53% for the year to date, Bloomberg reported.

It comes as Mr Odey is still trying to recoup losses suffered in five of the six years since 2015.

Government bond prices fell amid rising inflation. Mr Odey has long predicted that central banks would reverse quantitative easing and raise interest rates to fight rising prices.

In a letter to clients last month, Mr Odey said: ‘Everyone knows that the West is bankrupt somewhere around 3% interest rates, so the fight now is how do interest rates interest of 0.5% can slow down inflation which is potentially on the way to 10%.

“Long bonds are fighting this battle pretty much on their own.”

The prices of both long-term bonds in Mr. Odey’s fund have fallen this year amid soaring inflation. Consumer prices have risen at their fastest pace in 30 years as the cost of energy, clothing and footwear continues to rise.

Consumer price inflation hit 6.2% in February and some economists fear it could hit 8% soon.

Mr. Odey has also started buying stakes in oil and gas companies to take advantage of the energy crisis. Rival asset managers are selling companies to meet their funds’ environmental goals.

However, Mr Odey argued there was ‘money to be made’ as the international community seeks to sanction Russian exports of coal, oil and gas to end Vladimir Putin’s war with Ukraine.

Speaking to the Telegraph last month, Mr Odey said: ‘The last time 10% of global production was taken out, that is Saudi Arabia [crisis] in 1973 the price of oil rose by 300 pc. So you are probably in the early days. There is still some money to be made at the moment.”

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This notice was published: 2022-04-06 15:18:42

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