H2O AM is pushing back the horizon of reopening its illiquid funds

The outcome seemed close for French savers who were clients of H2O Asset Management (AM). It was finally rejected yesterday by the management company, which thanks its clients… for their “patience”. The London boutique, from which the Natixis bank is in the process of being separated, had undertaken to reopen the illiquid part of its funds under French law by the end of June. On Tuesday, she announced a new plan for the sale of these 1.6 billion euros of assets blocked since last August.

“After evaluating the risks, timescales and prices of the various solutions, the restructuring of the assets, with a view to rationalizing the funds’ exposure to the Tennor group, was chosen,” declares H2O. It will offer more stability to initiate the disposal of assets. “

An issue of 1.45 billion euros

This operation is part of the debt restructuring unveiled discreetly on May 22 by Tennor, the Dutch holding company of the sulphurous German businessman Lars Windhorst. Exposure to this group, to illiquid assets, is the reason for the confinement of part of H2O’s outstandings, closed to subscriptions and redemptions.

Bruno Crastes’ store will visibly swap its illiquid assets for a “first super senior secured note (FSSSN)”, ie short-term securities issued by Tennor with a “maturity at the start of 2022”. This new debt of 1.45 billion euros, or more or less the amount of illiquid H2O outstanding, is accompanied by an interest rate of 4.5% according to Tennor.

The issue, “which provides for intermediate partial repayments, is a step in the process of liquidating the confined pockets”, ensures H2O, advised by Perella Weinberg.

French funds soon to be valued

There is no indication that this internal sleight of hand will allow Tennor to honor its new commitments and H2O to reimburse its customers. Already last year, the management company signed an “Evergreen” contract which provided for the sale of part of its unlisted securities to a consortium of investors linked to Lars Windhorst. “Evergreen is very late and the commitments have not been kept by the Tennor group,” concedes a source familiar with the matter.

The only consolation, H2O undertakes to publish, “during the first week of June, an updated estimated valuation of SP funds (side pocketed or quartered, Editor’s note), taking into account the FSSSN”. The value of units in these funds has not been updated for three months.

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