Natixis’s H2o Liquidity Crisis

The video discusses the impact of central bank stimulus on fixed income managers, leading them to invest in less liquid assets. It highlights the cases of Tim Haywood and Neil Woodford, who faced issues due to insufficient due diligence and regulatory breaches. The recent crisis at H2O, backed by Natixis, is examined, where illiquid bonds led to significant outflows and a drop in Natixis shares. The video concludes with the consequences for H2O and its investors.

What is a potential risk of investing in less liquid assets?

• They might be harder to sell on short notice.

• They offer lower returns.

• They are always more secure.

• They are easier to sell quickly.

What was a key factor in Tim Haywood's downfall?

• Following regulatory guidelines

• Exceeding investment limits

• Lack of sufficient due diligence

• Investing in highly liquid assets

What issue did Neil Woodford's investment strategy face?

• Following regulatory guidelines

• Investing in highly liquid assets

• Heavy weighting in unquoted companies

• Exceeding investment limits

What was the consequence of the crisis at Natixis-backed H2O?

• No impact on the fund

• Increase in fund inflows

• Stable share prices

• Massive outflows and share price drop

Who was identified as the tenth biggest investor in the H2O fund?

• Neil Woodford

• Tim Haywood

• GAM

• Morningstar