1. Natixis supports the measures announced by H2O Asset Management relating to the following topics:
Intrinsic liquidity of securities
Regarding the intrinsic liquidity of securities that have been considered as illiquid, H2O AM teams have continued to adopt the required measures in order to fully ensure their valuation in regards of their condition of liquidity.
The relevant assets are private debt securities relating to a wide variety of companies, none of which are currently in a default situation. However, considering the current environment, the H2O AM teams have decided to record these securities at their transactional value in case of an immediate total sale rather than recording them at their standard market value, it being specified that their transactional value has been determined with valuations obtained this Sunday from international banks which are independent from Natixis. Such securities represent a total exposure for H2O funds of less than 2% of the outstanding amounts under these funds (source H2O AM). This will enable remaining clients and new investors to retrieve the long-term value of their securities.
The liquidity of the securities is ensured and will allow to face potential additional withdrawals, if some clients decide to partially sell their funds due to a concern about the media coverage associated with these securities. In addition, the long-term performance drivers of H2O funds, which have been proven over numerous years to the benefit of our clients, remain unaffected as they are not related to this type of investment (see detailed press release of H2O AM dated 20 June 2019).
Removal of entrance fees
H2O AM has announced the removal until further notice of all the entrance fees that had been implemented several months ago in all their funds.
Additionally, H2O AM has announced the implementation, in 2017, of swing pricing rules with a view to protecting the security holders remaining in the funds from the payment of fees incurred by investor exits. Such fees will therefore be borne by those investors requesting the buyback of their securities.
2. Natixis confirms the principles of its multi-affiliates model for asset management
Natixis’ asset management model relies on 25 management companies, all of which are independent from each other, autonomous in their investment policy and rely on talented investment managers. Natixis Investment Managers provides a global distribution platform for the benefit of all its affiliates and, in particular, monitors the control and compliance functions.
In the context of restoring confidence in H2O Asset Management, Natixis has also decided to bring forward the periodic audit performed on this affiliate, by implementing it as of 21 June 2019. By way of reminder, the General Inspection of the bank performs an audit of all the affiliates of Natixis Investment Managers on a regular basis.
As of 31 March 2019, the assets under management by our 25 affiliates are equal to 855 billion euros. The differences in the management approach of each of these affiliates enable to offer a wide range of products in order to satisfy a customer base which is diverse in terms of geography and risk appetite.
As of 31 March 2019, H2O Asset Management has approximately 31 billion euros of assets under management for a wide customer base. Natixis has 20 million euros of seed money from Atlantera funds and a commitment of 25 million euros from a fund which is in the process of being constituted. H2O Asset Management represents approximately 3.7% of the assets managed by Natixis Investment Managers and its contribution to the net group income of Natixis reached 5% in 2017, 11% in 2018 and 6% in the first quarter of 2019 (excluding IFRIC 21 impact). It is reminded that the contribution for 2018 included approximately 420 million euros of performance fees, corresponding to 13% of the 2018 asset management revenues, versus a long-term average of approximately 7% which is used as a basis for Natixis New Dimension targets.
