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Yesterday when describing the latest developments surrounding the Natixis-owned, ill-named H20 Asset Management, which has found itself in a toxic spiral of holding illiquid assets yet facing growing redemptions following Morningstar's questioning of the “liquidity and appropriateness” of some of H2O’s corporate-bond holdings as well as potential conflicts of interest, and suspended its recommendation on Wednesday, we reported that the fund unveiled an "ingenious"
way to halt redemptions without actually imposing gates: it marked down the balance of its holdings "to remove incentives for investors to pull even more."
Plan - Work
We also asked, rhetorically, whether this plan work?
That's the question as fund managers hope to reverse outflows from a group of H2O funds that saw their assets drop by 1.1 billion euros on Thursday as analysts questioned their holdings.
Hours - Question - Monday - H20 - Assets
Less than 24 hours later we have the question: it did not, because on Monday H20 saw its assets decline even more as a group of its largest funds seeing their biggest ever single-day drop. In the fourth consecutive day of accelerating redemptions, the money manager paradoxically named for liquidity - of which it has none as it scrambles to offload its most illiquid holdings - saw six of H20's biggest funds fall by 2.6 billion euros, or about $3 billion, on Monday.
Yet while to most funds the redemption of nearly €6 billion in funds would prove terminal, perhaps H2O will manage to turn the tide - the fund said it received "material" inflows after a slowdown in net outflows since Monday:
H2O - AM - Outflows - Monday - June
H2O AM hereby confirms that the net outflows have slowed significantly since Monday June 24th. In addition, H2O funds received some material inflows...
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