Step aside Neil Woodford (and your disastrous investments in illiquid assets), and make room for French bank Natixis (and its own disastrous investments in illiquid assets), whose shares plunged 10% to the lowest in three years, after bond rating giant Morningstar suspended its rating on the woefully-named H2O Asset Management’s Allegro Fund yesterday, citing concerns over “the liquidity of certain bonds”.
"H20" fund... lack of liquidity... get it?
Natixis - Holdings - Debt - Lars - Windhorst
The questionable Natixis holdings are linked to debt issued by Lars Windhorst, "a flamboyant German entrepreneur with a history of legal troubles" according to the FT, which first flagged the Allegro fund's shady holdings.
Some history: the London-based H20, which oversees about €30bn of assets, has been a subsidiary of Natixis Investment Managers since it was bought in July 2010. Executives sent a message to clients on Wednesday to reassure them about the liquidity of its investments and that its positions had been “fully disclosed to our clients and auditors”.
Suspension - Concern - Quality - Oversight - Natixis
"The suspension raises concern about the quality of oversight by Natixis management of its network of asset managers," KBW analyst Jean-Pierre Lambert told the FT, adding that in the vein of the Woodford fiasco, the €250MM performance fee H20 pays Natixis could be affected, and questions should be raised about the French bank’s flurry of recent asset management acquisitions and stated ambition for more.
In response, Natixis said on Thursday that suspension of the rating has "absolutely no impact on the liquidity and performance of H2O’s funds. H2O will communicate shortly in detail to address all the questions raised by the publication of these elements.” The statement added that “the risk of a potential conflict of interest” raised by Morningstar was "groundless."
Course - Weeks - UK - Investment - Legend
Of course, a few weeks ago, UK "investment legend" Neil Woodford said the same thing when a "fund run" on his assets resulted in an unprecedented...
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