Asset manager H20 says redemptions are falling after it was hit by a wave of outflows
Under fire asset management firm H20 said today that there had been “substantial inflows” of funds in recent days and redemptions had fallen to five times less than they were at their peak last Friday.
The firm had been hit by a wave of clients withdrawing their money after the Financial Times last week questioned its relationship with controversial financier Lars Windhorst and the level of illiquidity in its portfolio.
In a statement today H20 said “there have been substantial inflows” since Monday and said current assets under management (Aum) stands at €27bn (£24.2bn).
“Redemptions have markedly subsided to a level roughly five times less than at their peak (on 21 June), down to €450m today”, H20 said.
H20 also said it had sold part of its non-rated private bonds, meaning that now 98 per cent of its Aum is invested in liquid assets.
It said it had decided to remove all entry fees across all funds until further notice.
Chief executive Bruno Crastes said: “We are pleased to report that fund flows are returning to normal. We would like to thank our investors for their continued commitment to H2O and to reiterate that 98 per cent of assets held by our funds are perfectly liquid.”
Last week Morningstar put one of H2O’s funds under review. The ratings agency cited concerns over investments in illiquid bonds issued by firms related to Windhorst, who owns investment holding company Tennor.
Windhorst has been embroiled in several lawsuits surrounding the sale and repurchasing agreements of illiquid bonds, according to the FT.
H2O chief executive Bruno Crastes stepped down as a board member of Tennor following reports of a potential conflict of interest. He was replaced by H2O’s chief investment officer Vincent Chailley.
The issue of illiquidity open-ended funds has gained traction in recent weeks following the suspension of Neil Woodford’s equity income fund.