PARIS (Reuters) – H20, the London-based fund management arm of French bank Natixis which has been hit by outflows of money, said on Monday it had sold some of its bonds portfolio and removed entry fees across all its funds to attract fresh investors.
Natixis said separately that it backed H20’s moves and would also bring forward its audit on the H20 business, in order to restore confidence in the business.
“H2O has sold part of its non-rated private bonds and, based on a valuation received by international banks, marked down the balance in compliance with UCITS regulation, thereby cutting their aggregate market value below 2% of H2O’s assets under management,” H20 said in a statement.
“Following this mark down, triggered by press reports which dried up market liquidity and widened bid-ask spreads, H2O’s funds will be priced at a discount between 3% and 7%. H2O has decided to remove all entry fees across all funds until further notice,” the fund management company added.
H20’s decision to waive entry fees is a way for the company to attract fresh investors’ money and is also aimed at trying to offset the blows resulting from the drop in value of its portfolio.
H2O, a key contributor of profits at Natixis Investment Managers, was put in the spotlight last week when Morningstar flagged its review, citing questions over liquidity and governance at the H2O fund.
Concerns about liquidity in funds that allow investors to get their money back on a daily basis have risen recently, particularly in Britain where money manager Neil Woodford was forced to suspend trading in his flagship fund.
(Reporting by Sudip Kar-Gupta, Editing by Sherry Jacob-Phillips and Gopakumar Warrier)