By Nishant Kumar
LONDON, May 28 (Reuters) - Billionaire hedge fund manager Crispin Odey has cut risk and leverage following a stunning 19.3 percent loss in his 3.1 billion euros ($3.4 billion) Odey European Inc fund in April, a letter to investors seen by Reuters showed.
Describing the month as "bloody", Odey told clients his portfolio bet that a weakening Chinese economy would impact the global economy had been "attacked on all sides", and as a result he had lost money on his foreign exchange bets, oil and short positions in emerging markets.
The April loss marked the biggest ever monthly drop for the fund since its launch in 1992.
"Nobody likes being wrong. Nobody likes looking foolish. Nobody likes losing money," Odey told clients in the letter.
"In hindsight the tail wind that was the leveraged position in the US dollar against Emerging Market currencies in particular, meant that I did not respond quickly enough to the aggressive QE [quantitative easing] introduced by (European Central Bank President Mario) Draghi in December of last year and the effects of the fall in the oil price two months earlier."
An email to a spokeswoman for Odey Asset Management remained unanswered.
Odey's European fund was down 18.2 percent through the end of April this year, after the loss during the month. By comparison, European hedge funds as measured by industry tracker Eurekahedge are up 4.7 percent.
The fund manager, who runs the $12.9 billion Odey Asset Management company, said negative interest rates in Europe had pushed asset prices higher, creating a bubble that would end "badly".
"As we can see with the bull market in China, once a bubble forms it has an internal logic of its own and it will grow until it has outgrown all of its surroundings," he wrote.
"All of this has meant that the Fund is moving towards being net long equities."
Odey is among seven hedge fund billionaires in Britain, according to the Sunday Times Rich List released in April. ($1 = 0.9186 euros) (Reporting by Nishant Kumar; editing by Simon Jessop and David Evans)