Lars Windhorst apologises to H2O traders for losses | USAEMALL.com

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Lars Windhorst has apologised to the thousands of H2O Asset Management investors who lost money on opaque investments linked to his businesses, while pledging that he will keep repaying them using proceeds from new ventures. 

Windhorst, a scandal-prone German financier known for his extravagant lifestyle and long history of legal troubles, has for years had substantial debts hanging over him from his dealings with H2O Asset Management, which poured ordinary savers money into hard-to-sell bonds linked to his businesses.

Once a star of the European investment industry that oversaw more than €30bn at its peak, H2O froze €1.6bn of investors’ money it had placed into these illiquid investments in 2020 — the bulk of which remains trapped — after French regulators raised concerns around their valuation.

“I can only say that I personally feel sorry that this has happened,” Windhorst told the Financial Times, acknowledging that he had made “mistakes” in the past and would “keep repaying H2O” in future.

The financier also pledged that he would use proceeds from new ventures to compensate these investors, even though his new businesses are held in a legally separate vehicle to the one that H2O funded.

While H2O financed a constellation of businesses surrounding Windhorst’s Dutch investment vehicle Tennor Holding — from a lingerie maker to a football club — the financier has over the past few years predominantly cut deals through his newer entity Tennor International in Switzerland.

This new holding company has pursued deals in the Democratic Republic of Congo, which is at the centre of a scramble for critical minerals and where the financier has touted his close ties to government officials, and has in at least one instance bought assets out of insolvency from a company that H2O previously invested in. 

Windhorst told the FT that “the new Tennor” would allow H2O’s funds to “participate in upside and value which gets created there”, even though it had “no legal obligation towards H2O investors whatsoever”.

Windhorst made the remarks in an interview for a new FT film, in which he gives his own account of some of his biggest blow-ups and scandals — from earning a criminal conviction and surviving a plane crash, to being blamed for instigating a smear campaign against a football club boss. 

The FT film also reveals details of complex bond trades Windhorst proposed to H2O that involved Falcon Private Bank, a Swiss bank that was sanctioned by regulators for breaching money laundering rules in relation to the 1MDB scandal. Windhorst denied that any money laundering risk stemmed from the transactions while H2O declined to comment specifically on the trades.

Windhorst declined to confirm how much he ultimately borrowed from H2O, describing it as a “confidential” matter. Collectif Porteurs H2O, a group of 10,000 investors that is suing the asset manager in Paris, has claimed that the firm poured at least €2.3bn into stocks and bonds related to Windhorst, a figure H2O disputes.

H2O has so far repaid only €229mn to its fund investors, with a further €250mn earmarked for repayment as part of an August settlement with the UK’s Financial Conduct Authority in lieu of a “substantial fine” for “serious breaches” of the regulator’s rules.

H2O told the FT that none of its investors “lost their entire investment” because their funds were never solely invested in securities linked to Windhorst, claiming that those who redeemed the liquid part of their investment in 2020 will have recovered between 87 and 93 per cent.

H2O added that it rejected allegations made against it by Collectif Porteurs H2O.

Multiple creditors have chased Windhorst for repayment through the courts in recent years. Tennor Holding’s German shipbuilding business also filed for insolvency last week, putting 500 jobs at risk.

Despite these travails, Windhorst claimed that he was on the cusp of achieving greater successes in the business world.

“I feel very confident that even the Financial Times will be able to in the future write more positive things about me and Tennor than it has in the last 10 years,” he said.