Contentious Agreement Between H2O and FCA
Is it a major step, as claimed by the French asset manager H2O, or a deception, as asserted by the group of investors suing them? The agreement reached by H2O with the UK financial regulatory authority has sparked criticisms and questions. Accused since 2019 of investing over 1.6 billion euros in risky and illiquid assets of the Tennor group, controlled by German businessman Lars Windhorst, H2O has committed to paying 250 million euros to the shareholders of its “ringfenced” funds, the portion of its portfolio locked since 2020. A formal buyback offer is expected to be launched in September.
Dispute Over Compensation Offer
Those shareholders who accept the offer will have to waive any future claims for damages; in return, H2O promises them an “accelerated and enhanced” payment. Despite H2O’s assurances, the group of shareholders who sued several companies within the H2O group, including Natixis Investment Managers, KPMG, and Caceis, are not convinced. They are demanding over 800 million euros in compensation for their 9,000 members.
Concerns Over Payment Terms
Investors are not obligated to accept the upcoming offer, as stated in the agreement between H2O and the FCA. The payment may be delayed until 2031 for those who do not participate in the offer. H2O, exempted from admitting liability by the agreement, claims that shareholders can recover between 87% and 93% of their investment valuation as of August 28, 2020. However, the shareholders’ attorney argues that this presentation is misleading, as their calculation results in a higher amount than the 1.6 billion euros previously stated.
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