Scandal-hit H2O pays out £214m to investors with money in illiquid funds linked to notorious German financier
A once-successful asset manager is to pay out £215m to investors who have money tied up in illiquid funds linked to German financier Lars Windhorst.
The Financial Conduct Authority (FCA) has ordered H2O Asset Management to repay money to shareholders after it failed to properly investigate hard-to-sell securities linked to Tennor, a group founded by Windhorst (pictured with girlfriend Christine Barner).
It was also found that H2O does not have adequate procedures in place to manage conflicts of interest.
Scandals: Lars Windhorst (pictured with girlfriend Christine Barner) first rose to fame in the 1990s when he was hailed as a German corporate wunderkind.
This included more than 50 cases where hospitality had been received but not properly declared, including the use of a superyacht and a private jet.
Founded in 2010, H2O was a star in the European investment world under the leadership of CEO Bruno Crastes, managing over £26bn in assets.
But in 2019, it faced an exodus of investors after it emerged that the company had ties to Windhorst companies.
Withdrawals led to the group freezing £1.4bn of funds the following year, leaving investors trapped.
In 2023, the group was fined a record £64 million by French authorities.
But instead of a hefty fine, the FCA has ordered H2O to repay the investors whose money was stuck.
In addition to failings in due diligence and conflicts of interest, H2O also provided regulators with “false and misleading statements and documentation,” including “falsified records and minutes of meetings,” the FCA said.
H2O’s job was to manage funds properly and protect investors.
That has not been achieved and the FCA has been repeatedly provided with misleading information,’ said Steve Smart, the FCA’s director of enforcement and market oversight.
Windhorst rose to fame in the 1990s, but the dotcom crisis hit his businesses and in 2003 he filed for personal bankruptcy.
He later rebuilt his fortune, but in 2010 he was given a suspended prison sentence in Germany for ‘breach of trust’.
H2O’s chief Loic Guilloux said: ‘We have significantly improved and consolidated our organisation and strengthened the risk management and compliance teams, governance and internal procedures. These changes ensure that the lessons from this period are embedded in our culture.’
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