(Bloomberg) --
H2O Asset Management suffered heavy losses of as much as 30% across its funds during Monday’s market rout, adding to severe declines that have pummeled its strategies over the past month.
The Natixis SA-backed firm saw record daily drops in at least four of its money pools as coronavirus fears and an oil-price plunge rocked markets. H2O’s Multiequities fund lost about 30%, erasing about six years of gains. Its Vivace strategy slumped 26%, the Multibonds fund lost 20%, and the firm’s flagship Allegro fund fell 18%.
A spokesman for London-based H2O declined to comment.
Shares in Natixis, the majority owner of H2O, were down 8.4% at 12:47 p.m. in Paris.
“In stocks, our strategies underperformed,” H2O said in a letter to investors seen by Bloomberg on Monday. “In three weeks, what was expensive has become prohibitive, and what was affordable has become a bargain.”
| Fund name | Monday Return | YTD Return | 2019 Return |
|---|---|---|---|
| H2O Multiequities | -30.5% | -53.4% | 41.8% |
| H2O Allegro | -17.9% | -34.9% | 39.6% |
| H2O Multibonds | -20.1% | -36.5% | 33.6% |
| H2O Vivace | -26% | -49.5% | 30.1% |
Prior to Monday’s selloff, H2O had seen three of its top performing strategies, including Allegro, sink to the bottom in a ranking of more than 500 tracked by Kepler Partners that use hedge fund-type tactics to make money. Vivace, a global macro fund, slumped about 29% in the month leading up to Monday’s rout, while its MultiReturns fund lost almost 17%.
“Another source of our underperformance was due to Italian government bonds, which were aggressively sold off due to the virus,” the letter said.
The losses contrast with a blockbuster year in 2019, when some of H2O’s funds gained more than 40%.
The firm, led by Bruno Crastes and Vincent Chailley, was under the spotlight last year for investing in thinly traded bonds linked to Lars Windhorst. When Morningstar Inc. suspended its rating on one of the firm’s funds, clients pulled $8 billion in a matter of two weeks.
The recent market moves didn’t correspond with macroeconomic reality, the firm told investors on Monday.
It is important “not to regret being caught -- almost impossible in the case of Coved-19 -- but to manage the exit well,” the letter said.
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