Natixis to Sell H2O Stake to Investment Firm’s Management
(Bloomberg) -- Natixis SA has agreed to sell its majority stake in H2O Asset Management back to the investment firm’s management team, ending a decade-long relationship that’s recently been marred by controversy.
Natixis last year said it was in talks about a “progressive and orderly unwinding” of its partnership with the London fund manager, which could include a sale of its stake. The move could be a blow to H2O, which had relied on Natixis’s huge distribution network to help bring investors into its 20 billion euros ($24.6 billion) of funds.
“We agreed with management that we would part amicably in total agreement with management buying our stake in the company,” Jean Raby, chief executive officer of Natixis Investment Managers, said Monday in a Bloomberg TV interview. “It’s subject to regulatory approval, and we’re doing this in an orderly manner in a transition that has at the heart of it the interest of our clients.”
For much of the past decade, H2O has been a jewel in the crown of Natixis’s stable of money managers, wowing an army of loyal clients with often stellar performance, at a time when negative interest rates starved savers of returns. Headed by Bruno Crastes, who had built up a reputation for his strong returns at Credit Agricole SA, the firm’s outsized gains coupled with high performance fees made H2O a lucrative investment for Natixis.
But the French lender has endured a barrage of negative publicity tied to H2O and its relationship with German financier Lars Windhorst, for more than a year. Investors panicked in the middle of 2019 when rating firm Morningstar Inc. flagged concerns about a stack of thinly traded securities tied to the financier that were sitting in some of H2O’s funds, leading them to pull about 8 billion euros within days.
The scandal came back to haunt H2O in August last year when the French regulator pressured it to freeze a series of funds containing the securities, which it’s in the process of selling back to Windhorst.
Calls to representatives of H2O on Monday were not immediately returned.
Unlike other peers in fund management, Natixis takes stakes in boutique money managers rather than consolidating all its funds under one company. That makes them distinct from rivals like Amundi SA and BNP Paribas SA’s asset management division.
“It demonstrates the resiliency of our model, the multi-boutique model,” Raby said in the interview. “H2O will leave us, but some of them will also will join us” he said, pointing to the possibility of future partnerships with other firms.
©2021 Bloomberg L.P.