H2O AM suspends funds at French regulator's request

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The affected products are the H2O Allegro, H2O MultiBonds and H2O MultiStrategies funds
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The affected products are the H2O Allegro, H2O MultiBonds and H2O MultiStrategies funds

H2O Asset Management has suspended three of its funds following a request by the French regulator the Autorité des Marchés Financiers (AMF), citing the funds' "significant exposure" to private securities.

On 28 August, the AMF asked H2O to suspend the subscriptions and redemptions of the three French-domiciled UCITS funds H2O Allegro, H2O MultiBonds and H2O MultiStrategies "to protect the interests of unit holders and the public."

H2O extended the suspension to five other funds, including H2O Adagio, H2O Moderato, H2O MultiEquities, H2O Vivace and H2O Deep Value AIF which it said were "also exposed to these securities."

This suspension period is temporary, and should last around four weeks, during which H2O will actively manage the portfolios while creating, for the seven above-mentioned UCITS, side pockets that will hold the ‘private' securities."

In a statement, H2O said: "This suspension period is temporary, and should last around four weeks, during which H2O will actively manage the portfolios while creating, for the seven above-mentioned UCITS, side pockets that will hold the ‘private' securities.

"In the meantime, all the funds' other assets will be transferred into new UCITS that will duplicate H2O's Global Macro investment strategy as before."

The move by the French regulator comes after it was reported in May this year that German financier Lars Windhorst, who had been previously linked by the Financial Times to H2O's illiquid stock and bond holdings, was preparing to buy back the assets from the firm.

In 2019, investors pulled more than €8bn from the asset manager's funds after the scale of the exposure to the hard to sell assets came to light.

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