H2O Says Redemptions Have Slowed as Asset Bleeding Stemmed

(Bloomberg) -- H2O Asset Management says redemptions from its funds have “markedly subsided” as the pace that investors pulled cash from its strategies slowed.

The company said that assets under management stood at 27 billion euros ($31 billion). The money manager said that redemptions were slower than they were last week, with 450 million pulled from its strategies by clients on Wednesday. That’s a big drop since April, when H2O said that its total assets under management were $37.6 billion, in a letter to investors seen by Bloomberg.

“Fund flows are returning to normal,” Chief Executive Officer Bruno Crastes says in statement. “We would like to thank our investors for their continued commitment to H2O and to reiterate that 98% of assets held by our funds are perfectly liquid.”

H2O’s crisis started after the Financial Times showed the exposure of several of its funds to companies related to Lars Windhorst, a German financier with a history of troubled investments. Morningstar Inc., a research firm used by investors as a guide to buy or sell funds, subsequently suspended its bronze rating on the Allegro fund over concerns about the “liquidity and appropriateness” of some of its holdings.

To contact the reporter on this story: Lucca de Paoli in London at gdepaoli1@bloomberg.net

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Abigail Moses

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