Asset manager H2O AM LLP will pay €250 million to investors unable to access their funds since 2020, following an investigation by the UK Financial Conduct Authority (FCA).
Between April 2015 and November 2019, H2O failed to carry out proper due diligence on investments relating to the Tennor Group of companies owned by Lars Windhorst, or other companies he introduced.
The investments were high risk and hard to sell.
The FCA also found that H2O did not have adequate policies or procedures or exercise due skill and care in managing potential conflicts of interest. The FCA identified over 50 instances where hospitality had been received by H2O employees but was not properly declared, including the use of a superyacht and private jet.
H2O also provided false and misleading statements and documentation to the regulator, such as fabricated records and minutes of meetings.
The FCA would have imposed a substantial fine on H2O for its serious breaches. However, the FCA has agreed the firm will make €250 million available to all those whose investments remain trapped. A significant part of this sum has been made available by way of voluntary contribution from the H2O Group.
H2O has waived its rights to fees and investments totalling €320 million and will apply to cancel its UK authorisation by the end of the year.
The French financial services regulator the Autorité des marchés financiers (AMF) is the designated regulator in respect of the collective investments, which H2O managed on a cross-border basis pursuant to the UCITS Directive, and the FCA is the designated regulator of H2O.
