Daily Management Review

Analysts’ Take On Natixis’ Attempts Of Dealing With H2O Situation


Learn about what Credit Suisse and KBW has to say after attending Natixis’ top management meeting.

Source: flickr.com; (CC BY 2.0)
Source: flickr.com; (CC BY 2.0)
Natixis, the French Bank, discussed with equity analysts for finding a way of winning back the confidence of the investors after it witnesses a “withdrawal of clients’ money from its H20 asset management arm”.
As per “Credit Suisse and brokerage Keefe, Bruyette & Woods”, analysts from both the firms were present in the top management meet of Natixis. While KBW wrote:
“Natixis this morning held a sell side analyst meeting with Francois Riahi, its CEO, and Jean Raby, CEO of Natixis Investment Managers. We see this meeting as a first, positive step towards a discussion/dialogue on the lessons to be learned”.
With a note of underperformance of Natixis, KBW added:
“In our view though, the issues raised cannot be circumscribed to H2O or a few H2O retail funds, but there are wider structural issues associated with the affiliate model to be reviewed and discussed, an opportunity which should not be missed”.
On the other hand, Credit Suisse after attending the presentation stated:
“However, we think the good performance of H20 in 2019 should limit any downgrades, and crystallisation of performance fees from exits in 2Q19 should support the current quarter. We continue to see the underperformance of Natixis in the last 5 trading days as overdone”.
Moreover, in this week itself, H2O sold “some illiquid assets’ besides removing “entry fees across its funds” as it is trying to retain the “outflows of customer money”. According to Reuters:
“Around 1.4 billion euros (1.2 billion pounds) was pulled from H2O funds last week after rating company Morningstar put one of its funds under review, citing concerns over liquidity and governance, which also hit Natixis’ shares last week. Those concerns had also been raised in a Financial Times report”.