H2O
AM
has
been
dealt
another
blow.
On
August
7,
the
asset
management
company
announced
that
it
had
reached
an
agreement
with
the
FCA
to
end
the
UK
regulator’s
investigation
into
the
company.
This
investigation
concerned
the
relationship
between
H2O
AM
and
German
financier
Lars
Windhorst’s
company
Tennor
Holding
between
2015
and
2019.
As
part
of
this
agreement,
H2O
AM
“has
secured
an
amount
of
€250
million
to
finance
an
offer
proposed
to
all
holders
of
the
hived-off
funds
on
an
equal
basis
from
the
fourth
quarter
of
2024”,
according
to
a
press
release.
“We
note
the
FCA’s
conclusions
on
the
investments
made
by
H2O
AM
LLP
in
private
securities
between
2015
and
2019,”
says
Loïc
Guilloux,
the
group’s
chief
executive
since
January
2023.
Heavy
Penalty
Avoided
by
H2O
The
company
is
also
waiving
€320
million
representing
“its
rights
to
fees
and
investments”
and
has
agreed
to
close
its
UK
operations
by
the
end
of
the
year.
In
a
statement,
the
FCA
said
that
“between
April
2015
and
November
2019,
H2O
failed
to
carry
out
due
diligence
on
investments
related
to
the
Tennor
group
of
companies
owned
by
Lars
Windhorst,
or
other
companies
he
introduced.
The
investments
were
very
risky
and
difficult
to
sell.”
“The
FCA
also
found
that
H2O
had
not
put
in
place
adequate
policies
or
procedures
and
had
not
exercised
due
skill
and
care
to
manage
potential
conflicts
of
interest.
The
FCA
identified
more
than
50
instances
where
H2O
employees
received
hospitality
that
was
not
properly
declared,
including
the
use
of
a
superyacht
and
a
private
jet.
“H2O
also
provided
the
regulator
with
false
and
misleading
statements
and
documents,
such
as
fabricated
minutes
and
minutes
of
meetings.”
“The
FCA
would
have
imposed
a
substantial
fine
on
H2O
for
its
serious
breaches,”
the
regulator
added.
The
agreement
announced
today
avoids
such
a
penalty
for
the
management
company,
but
nonetheless
represents
a
severe
punishment
for
H2O
AM.
Contacted
for
further
details
on
the
consequences
of
this
departure
from
the
UK,
H2O
AM
was
not
immediately
available
for
comment.
Legal
Action
in
France
This
agreement
comes
at
a
time
when
thousands
of
aggrieved
investors
in
France
have
taken
legal
action
against
the
management
company.
The
management
company
and
its
managing
director,
Bruno
Crastes,
had
already
been
heavily
sanctioned
by
the
AMF
in
January
2023
for
investing
in
illiquid
assets,
revealing
major
failings
in
terms
of
risk
management
and
control.
The
special
notice
published
by
the
FCA
sheds
new
light
on
these
failings
and
the
special
relationship
between
H2O
AM’s
directors
at
the
time
and
Lars
Winhorst
and
his
holding
company.
Towards
an
Exit
from
Natixis?
“This
step
is
good
news
in
that
it
brings
closure
for
investors
in
the
hived-off
funds,
who
will
finally
be
able
to
recover
part
of
their
investment.
However,
the
outcome
needs
to
be
qualified:
the
net
asset
value
of
the
funds
had
plummeted
in
the
period
leading
up
to
the
suspension,
so
the
total
performance
over
the
holding
period
remains
disappointing
for
some
investors”,
says
Mara
Dobrescu,
Morningstar’s
Global
Head
of
Bond
Research.
“This
agreement
also
means
that
H2O
is
giving
up
local
authorisation
for
its
funds,
which
de
facto
puts
an
end
to
its
development
in
the
UK,”
adds
Mara
Dobrescu.
“These
developments
could
finally
speed
up
the
timetable
for
Natixis
to
exit
H2O’s
capital.
However,
there
are
still
other
obstacles
to
overcome.
In
2023,
H2O
was
taken
to
court
in
France
by
groups
of
investors
who
estimated
their
losses
at
€674
million
–
it
remains
to
be
seen
whether
the
compensation
paid
to
date,
together
with
the
fees
H2O
has
agreed
to
waive,
will
be
enough
to
make
up
for
these
losses.
-
This
article
was
originally
published
in
French
and
translated
using
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