By Thyagaraju Adinarayan and Sudip Kar-Gupta
PARIS/LONDON (Reuters) – French bank Natixis held briefings with equity analysts on Wednesday to try and win back the confidence of investors in the wake of a withdrawal of clients’ money from its H20 asset management arm.
Analysts at both Credit Suisse and brokerage Keefe, Bruyette & Woods (KBW) wrote on Wednesday that they had attended presentations held by Natixis’ top management.
“Natixis this morning held a sell side analyst meeting with Francois Riahi, its CEO, and Jean Raby, CEO of Natixis Investment Managers. We see this meeting as a first, positive step towards a discussion/dialogue on the lessons to be learned,” wrote KBW.
“In our view though, the issues raised cannot be circumscribed to H2O or a few H2O retail funds, but there are wider structural issues associated with the affiliate model to be reviewed and discussed, an opportunity which should not be missed,” it added, keeping an “underperform” rating on Natixis.
Credit Suisse also said it had attended the presentation, although it had a more upbeat assessment than KBW, despite not expecting H20 to start winning back money yet.
“However, we think the good performance of H20 in 2019 should limit any downgrades, and crystallisation of performance fees from exits in 2Q19 should support the current quarter. We continue to see the underperformance of Natixis in the last 5 trading days as overdone,” wrote Credit Suisse.
Earlier this week, H20 sold off some illiquid assets and removed entry fees across its funds as it tries to stem outflows of customer money.
Around 1.4 billion euros (1.2 billion pounds) was pulled from H2O funds last week after rating company Morningstar put one of its funds under review, citing concerns over liquidity and governance, which also hit Natixis’ shares last week. Those concerns had also been raised in a Financial Times report.
In a statement issued on June 25, H20 said its net outflows had slowed significantly since Monday and that it had received “material inflows” on June 25.
Natixis shares were flat by 1310 GMT, with the stock down by nearly 10% so far in 2019.
(Reporting by Thyagaraju Adinarayan and Sudip Kar-Gupta)