Monday 19 August 2019

Natixis plunges after concerns over bond

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Lucca de Paoli, Nishant Kumar & Fabio Benedetti-Valentini

Shares in French bank Natixis plunged after research firm Morningstar Inc cited concerns about the "liquidity and appropriateness" of some corporate-bond holdings in a fund owned by the lender.

The US research firm suspended its rating on H2O Asset Management's Allegro fund, which managed €2.2bn at the end of May and had received Morningstar's third- highest rating before being placed under review, said a June 19 note. The firm had previously flagged concerns about risk management at the fund in September.

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Morningstar's decision adds to growing jitters in the fund management industry about liquidity and fund manager decision-making.

Earlier this month, Neil Woodford shocked the financial world when he froze redemptions from his flagship fund, inviting scrutiny from regulators and leading some of his biggest backers to walk away.

Swiss asset manager GAM Holding is still reeling from alleged misconduct by a former star bond-fund manager.

Natixis dropped about 11pc on Thursday in Paris to the lowest since August 2016.

The liquidity and performance of H20 funds are not in question after the Morningstar report, the Parisian bank said on Thursday, adding that H20 - in which it owns almost 50pc - will give more details shortly.

"The development raises concerns about the quality of oversight of Natixis's management of its network of asset managers," Jean Pierre Lambert, an analyst at Keefe, Bruyette & Woods, wrote in a note to clients.

Bloomberg

Irish Independent

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