H2O Hires Adviser at FCA’s Request to Help Sell Windhorst Assets

(Bloomberg) -- Beleaguered investment firm H2O Asset Management hired a financial adviser at the request of the U.K.’s market regulator to assist in the sale of thinly traded securities issued by companies linked to German financier Lars Windhorst.

The money manager has brought in Perella Weinberg Partners to act as an adviser on the sale of the assets, according to a statement on H2O’s website. The holdings were at the center of a crisis for the fund manager, which saw around 8 billion euros ($9.7 billion) leave the group’s funds over two weeks in 2019.

“We have, on the initiative and at the request of the Financial Conduct Authority, and with the full support of the management of H2O AM, appointed a financial adviser, Perella Weinberg Partners,” the statement on H2O’s website said. Perella will support the firm “in defining and executing the strategy for the sale of these assets.”

H2O and its relationship with Windhorst has generated nearly two years of bad headlines for the firm. Investors panicked in the middle of 2019 when fund rating company Morningstar Inc. flagged concerns about a stack of thinly traded securities tied to the German financier that were held by some of H2O’s funds.

The scandal came back to haunt H2O in August last year when the French regulator pressured it to freeze a series of funds containing the securities, which it had been in the process of selling back to Windhorst. H2O’s long-time backer, French investment bank Natixis SA, is in the process of selling its majority stake in the firm back to management.

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