French regulator fines asset manager H2O a record €75 million over its investment in illiquid debt linked to controversial investor Lars Windhorst, co-founder Bruno Crustes, a veteran, was banned from the industry for five years.
Autorité des Marchés Financiers said H2O Asset Management will begin repaying investors part of the €1.6 billion that has been trapped in its funds for more than two years, following partial repayment by Windhorst’s firm. announced the fine on the same day. tenor holding.
The French asset manager said on Tuesday that Tenor made a “partial repayment” of bonds held by H2O last month.
H2O said this means that in the coming days, it has been more than two years since the asset manager split the illiquid assets associated with Windhorst, locking in the savings of thousands of small investors. It added that it will be able to start the “first repayment phase”.
“With this new milestone, H2O reaffirms its commitment to fully dispose of segregated assets,” the company said.
The announcement follows a request by the French financial watchdog to suspend some of its flagship funds, a specially created sub-fund H2O has set up to hold Windhorst-related assets in 2020. suggests that investors will initially receive only a portion of the €1.6 billion frozen in I was concerned about the valuation of these assets.
The assets were valued at €1.6 billion at the time of the split, but in December 2021 H2O reduced them to €1 billion.
On Tuesday, the AMF also fined Crastes €15 million and fined Chief Investment Officer Vincent Chailley €3 million for what it previously described as a “serious” rule violation related to investments related to Windhorst. announced a fine of euros.
H2O, once a reputed money manager that oversaw €30 billion in assets, has gone from crisis to crisis since the Financial Times reported in 2019 on the size of Windhorst-related investments.
Windhorst rose to fame in Germany as a teenage entrepreneur in the mid-1990s, but endured setbacks in 2010, all the way to a suspended prison sentence for alleged “breach of trust.”
H2O is also under investigation by the UK’s Financial Conduct Authority and in France faces a lawsuit from Collectif Porteurs H2O, a group of over 3,000 clients. Collectif Porteurs H2O obtained a court order last year appointing an expert to review his H2O transactions related to Windhorst.
H2O said on Tuesday that all investors “will be treated equally in making these repayments.”
Windhorst first entered into an agreement to repurchase illiquid Tennor debt and shares in April 2020. The company was temporarily declared insolvent by a Dutch court.
H2O’s announcement suggests that Windhorst received an initial payment less than the €550 million he said he would pay back in the coming weeks in August.
H2O did not respond to a request for comment. Windhorst declined to comment.
In a statement following the AMF’s announcement, Collectif Porteurs H2O said that H2O had previously significantly reduced its Tennor-related debt, so the refund would not be able to significantly reduce the losses suffered by investors. . Group president Gérard Moran said it will “apply to the courts to obtain the return of blocked savings.”