Natixis to Sell a Majority Stake in H2O Asset Management

Natixis has agreed to sell a majority of its stake in the controversial investment firm, H2O Asset Management, that managed to bring high returns over the years, Bloomberg reported on Monday.

The French investment bank backed H2O since its inception a decade ago and the decision turned out to be a good one as the asset manager managed to return massive gains to its clients.

The exit is not a prompt one, as Natixis revealed last year that it is in the process of a “progressive and orderly unwinding” from its long partnership with H2O. The investment bank will return its investments to the management team at H2O.

“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. “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.”

An Excellent Investment Hampered Reputation

Natixis decided to end ties with H2O as the latter was riddled with controversies.

The asset manager’s 1 billion euro investment into the illiquid bonds related to the business of the controversial German financier Lars Windhorst was revealed in 2019 that resulted in negative publicity.

The French regulator also came after Natixis last year because of its H2O ties, scrutinizing its risk management processes.

Natixis’ exit will harm H2O in a major way, as the asset manager was heavily dependent on the French bank’s distribution network for its 20 billion euros of funds.

Meanwhile, the French investment bank is expanding its business in the Middle East and opened a new office in Saudi Arabia last year.