H2O Funds Tied to Goldman’s Windhorst Trading Web That Went Awry
H2O Funds Tied to Goldman’s Windhorst Trading Web That Went Awry
(Bloomberg) -- Goldman Sachs Group Inc. has had its own troubled dealings with Lars Windhorst and H2O Asset Management, the money manager fielding a surge in withdrawals this week because of illiquid investments tied to the controversial German financier.
In 2016, H2O was among investors trying to unload holdings in a money-losing digital advertising company backed by Windhorst, according to documents seen by Bloomberg. Goldman Sachs was facilitating the trades at the urging of Windhorst, only to have a buyer he had arranged renege on a payment, people with knowledge of the matter have said. That exposed the bank to potential losses, and years later, Goldman is still embroiled in an acrimonious lawsuit with the executive it fired over the deal, who says he was a scapegoat.
Natixis-backed H2O sent tremors through Europe’s financial industry over the past week after the Financial Times described how several of its funds are exposed to companies related to Windhorst, once famous as a wunderkind investor in Germany but later involved in a number of troubled deals. The situation at Goldman Sachs provides another snapshot of his ties to H2O and his effort just three years ago to help the money manager out of a potentially illiquid holding.
Representatives for the bank, H2O and Windhorst all declined to comment.
The H2O sale was part of a series of trades involving securities of RNTS Media that were unusual in that Windhorst had identified names of buyers and sellers, and in some cases even dictated the prices of the trade, the people have said. RNTS Media, whose shares have fallen more than 90% since the trades, has changed its name to Fyber NV. H2O funds still had exposure to Fyber as of last week, according to a company statement.
The 2016 trades went awry when Abu Dhabi brokerage ADS Securities failed to pay up on its side of the deal, temporarily leaving Goldman Sachs on the hook for $85 million, according to the suit and people with knowledge of matter. ADS has said it only acts as an intermediary and can’t comment on clients’ activities.
As the trade with Goldman was derailing, Windhorst tried to troubleshoot. In an email to a senior ADS executive, he wrote “I understand we have a total of” 35 million euros ($40 million) “for sale from the Goldman Sachs position,” according to the document seen by Bloomberg. "I am very confident I can secure tomorrow another" 25 million euros of investment from Marc Lasry, the billionaire co-founder of hedge fund Avenue Capital, he wrote.
Avenue Capital president Sonia Gardner said that investment didn’t happen. “Avenue Capital Group and its affiliates, including the firm’s employees and partners, have never invested with Lars Windhorst or Tennor,” she said.
Last month, Windhorst’s investment vehicle Sapinda Holding renamed itself Tennor Holding. The firm, which added Lasry and H2O founder Bruno Crastes to its advisory board in May, has been an investor in RNTS Media as the advertising company suffered through years of losses and became Fyber.
Crastes left the board last week. On Monday, a subsidiary of Tennor made a takeover offer for Fyber.
To contact the reporters on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net;Luca Casiraghi in London at lcasiraghi@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer
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