Crispin Odey, founder of Odey Asset Management, is warning of a new global financial crisis on the horizon and has moved a huge chunk of his portfolio into cash.

He says stock market valuations worldwide “are so overextended that they will need to fall 30 to 40 percent” before they offer a compelling bargain.

Odey, who founded London-based Odey Asset Management in 1991, says the turmoil that began last month has only just begun, and that equity markets could fall much further, MarketWatch reports.

“Our overriding conviction is that we are nearer the beginning of this process than the end,” the hedge fund manager warns clients in his latest report.

Odey now holds 29% of his retail investment fund, Odey Opus, in cash — even though the fund is typically oriented toward growth. The firms manages about $11.7 billion in assets.

“It’s easy to take prognostications with a pinch of salt,” MarketWatch’s Brett Arends points out.

“But Odey is no ordinary money manager. He is a living legend in London financial circles, and is usually bullish as well. His Opus fund is up 270% since it was launched in 2001, three times as much as its benchmark.”

There is a recession every decade and “we are now due ours.”

Other experts also recently have warned of recession.

"Current levels of recession risk predict below-average returns on equities and widening corporate spreads," JPMorgan economist Jesse Edgerton wrote on Wednesday. "At face value, these forecasts would suggest that asset allocations should begin to shift away from equities."

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