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H2O bond funds lose 50% of their asset value

H2O Asset Management’s bond funds have lost nearly half their value in a matter of weeks, after the London-based fund manager experienced another day of severe losses on Thursday.

H2O, a subsidiary of French bank Natixis that managed about €30bn of assets at the start of the year, has emerged as one of Europe’s highest-profile victims of the markets.

The investment firm on Tuesday sent a letter to clients warning of “surprisingly large” losses because of bad bets on bonds and currencies, before revealing that its flagship Multibonds fund had lost 20 per cent in a day on Monday.

The fund, managed by H2O’s chief executive Bruno Crastes, is down 49 per cent from its peak last month.  Multibonds and Allegro are two of H2O’s flagship funds, on which the firm placed fees for new investors last month after their assets hit €5.5bn and €1.6bn respectively.

Before their steep drops, H2O’s funds had been some of the best-performing in Europe over the past decade.   Morningstar warned in 2019 that this performance came at the “cost of higher risk than investors could have expected”, however, pointing to the “extensive use of leverage through derivatives”.

If you are an investor that lost funds in H2O, you should consider all legal options. If you wish to discuss your particular situation and the potential for the recovery of your investment losses, or you have information of interest, please contact us for an evaluation of your potential case.