Natixis has agreed to sell its majority stake in H2O back to the under-fire asset manager as it looks to draw a line under a partnership which has reaped high returns but also increased scrutiny of the bank’s risk management.
The French investment bank decided last year to cut ties with H2O, in which it owns just over 50 per cent, saying in November that it was in discussions with the investment manager about “a progressive and orderly unwinding.”
“We agreed with management that we would part amicably in total agreement with management buying our stake in the company,” Jean Raby, chief executive of Natixis Investment Managers told Bloomberg on Monday. “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.” Natixis confirmed the news.
Natixis had backed H2O since its creation a decade ago but has faced questions ever since the Financial Times revealed in 2019 that the asset manager had put more than €1bn of investors’ money into illiquid bonds linked to Lars Windhorst, a controversial German financier.
While recently embroiled in controversy, H2O has also brought outsized returns for investors. In its first decade, the asset manager recorded annual returns of over 30 per cent on five separate occasions.
The decision to sell out is part of a strategic reset by new Natixis chief executive Nicolas Namias, as he looks to cut costs, slash risk and restore confidence in its multi-boutique model, which takes majority stakes in smaller investment firms that continue to be run at arm’s length.