Natixis to cut loose embroiled H2O
French investment bank Natixis is seeking to sell its majority stake in under-fire H2O Asset Management.
Majority owner Natixis said it was in talks about a "progressive and orderly unwinding" of its partnership with the London fund manager. For almost a decade, H2O was a jewel in the crown of Natixis's stable of money managers. H2O, which manages more than $25bn in assets, is led by Bruno Crastes and Vincent Chailley.
The two firms are in discussions about an "orderly unwinding of their partnership" which could result in Natixis selling its 50.1% stake in H2O, or H2O taking on its own distribution over a transition period that would run to the end of 2021, according to a statement in the company's third quarter earnings.
I am taking decisions that put Natixis back on a positive trend
As a result of these measures, ‘H2O AM will no longer be considered a strategic asset of Natixis,' the statement added.
One option being explored is a progressive sale of Natixis's 50.01% stake in H20. Another is that H20 takes over the distribution of its own funds during a transition period until the end of next year.
H2O has been under fire ever since the Financial Times first reported that the firm's funds held more than €1.4bn ($1.6 bn) in illiquid bonds linked to German entrepreneur Lars Windhorst.
The move by Natixis is part of a strategic reset by new chief executive, Nicolas Namias. He is seeking to cut costs, slash risk and restore confidence in its multi-boutique model, which takes majority stakes in smaller investment firms that continue to be run at arm's length. "I am taking decisions that put Natixis back on a positive trend," Namias told the FT.
The asset manager has been under fire since the FT revealed in 2019 that it had put more than €1bn of investors' money into illiquid bonds linked to Lars Windhorst, a controversial German financier.
The Natixis unit agreed at the end of April to sell back the assets at a discount to a new investment vehicle set up by Windhorst, after the value of the company's flagship bond and foreign exchange funds dropped by more than half in March as the covid-19 pandemic hit financial markets.
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