H2O blames ‘unfair’ media for €8bn fund outflows

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H2O Asset Management says it has seen €8bn of investor outflows from some of its funds, blaming “deeply unfair” media interest in its portfolio of illiquid bonds for sparking a “rampage”.

In a statement on Tuesday, H2O said it had lost more than 30 per cent of assets in its Ucits funds. The outflows follow a Financial Times investigation last month that revealed the London-based asset manager had put more than €1bn of investor money into bonds linked to Lars Windhorst, a controversial German financier with a history of legal troubles.

The firm suggested that it had staunched the bleeding, noting that since June 18, the date of the FT’s original story, it had received €869m of gross inflows. The company did not immediately specify whether the €8bn outflows took account of these inflows.

Shares in H2O’s parent company Natixis fell 1.1 per cent on Tuesday. H2O ran €32.5bn in assets as at the end of last year.

The fund firm, headed by bond trader Bruno Crastes, said the bonds at the centre of media attention in recent weeks accounted for a “small portion” of its overall assets, at 3.7 per cent, at the time of the FT’s original article.

Asking “Why such rampage?” H2O said that “to dispute the liquidity of a fund” created a major risk of a snowball effect, “especially in today’s over-mediated world”.

It went on to liken the episode to a bank run. “Questioning the liquidity of our funds is equivalent to ascertaining the incapability of a bank to refund its deposits, with the devastating consequences which economic history has already taught us,” it said.

Since the crisis erupted last month Mr Crastes has described Mr Windhorst, who has presided over a number of corporate collapses and been declared personally … Read More...

Domino’s Pizza opens 100th outlet, invests over N10bn in Nigeria

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Eat’N’Go Limited , the franchisee operating Domino’s Pizza, Cold Stone Creamery, and Pinkberry Gourmet Frozen Yogurt in Nigeria has invested over N10 billion to grow its businesses.

This disclosure was made by the company’s Chief Executive Officer, Patrick McMichale who also confirmed that they are getting closer to their target of opening over 300 outlets in Nigeria. So far, a total of 100 outlets have been opened.

During the unveiling of the 100th outlet in Lagos, McMichale stated that the 100TH store was a reflection of the firm’s commitment to bringing quality and innovative food products to Nigeria’s
quick-service restaurants, while also becoming the premier dynamic and unique food operator in Africa.

The CEO further stressed that the company will continue to invest in the country, courtesy of its partnership with strong local banks.

According to McMichale, Eat’N’Go hopes to have over 300 outlets in the country. According to him; “Right now, we are celebrating our 100th store today but we are already up to the construction of 116 stores as we speak and we are still looking for sites, we have a plan to open more than 300 stores across Nigeria in the next five years,” Since its entrance into the Nigerian market in 2012, Eat’N’Go has maintained a business model of opening its outlets in every major highway in Lagos, with the opening of its first Domino’s and Cold Stone outlet which has grown into 70 stores with over 2,000 indigenous team members spread across the country.

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Russia lines up borrowing spree as US sanctions fear wanes

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Russia believes that western investors’ fears of US sanctions on its sovereign debt have eased, paving the way for a borrowing spree this year.

Demand for the country’s debt has rocketed, deputy finance minister Vladimir Kolychev said in an interview, allowing Russia to sell Rbs375bn ($5.8bn) of rouble -denominated government bonds last month on top of a record Rbs400bn of issuance in April.

The Kremlin is planning to issue about Rbs1.55tn this year, he said, up about 40 per cent from
last year’s levels. “We just stopped pushing back against. ..demand.. . as we knew that market conditions were favourable and investors had begun to work out sanctions issues,” he said.

“There’s less uncertainty and it has become more comfortable to live with those risks.” Foreign investors are hungry for Russian debt despite plans in the US Congress to stop them buying it, Mr Kolychev added.

“When [risk] first appears, you need time to work things out, calculate the possible consequences and the likelihood of this risk,” Mr Kolychev said. “While that process is ongoing it’s obviously difficult to take investment decisions before you’ve made a full evaluation. Now, in all likelihood, that process has naturally come
to a close.”

Investors’ appetite for Russian debt has held up despite the risk of further measures from the US
and EU, which began in 2014 when Moscow annexed Crimea from Ukraine. The threat of punitive measures has encouraged Russia to move further away from dollar bonds — which the US could sink by banning trades in its currency — towards domestic issuance.

Foreign holdings of Russia’s domestic debt have nearly recovered since the previous major round of US sanctions, when their share fell from 33 to 24 per cent of the total outstanding. By the end of … Read More...

SoftBank’s cash has poured out — it’s starting to come back

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Since SoftBank founder Masayoshi Son launched his $100bn Vision Fund in 2017, the business world has been fixated on the outflows: billions have gone to companies that range from Grab, the Singaporean car-hailing service, to WeWork, the US shared office provider.

The critical view of Mr Son as an opportunistic and even whimsical investor was given fresh ammunition last week with the revelations that he had lost $130m of his personal fortune on a bitcoin investment and poured €900m of SoftBank funds into Wirecard, the German payments group fighting an accounting scandal.

But the money is now also starting to flow the other way. Armed with cash from the $23.5bn listing of SoftBank’s mobile unit and Japan’s largest-ever corporate bond sale to retail investors, and with Uber’s blockbuster IPO around the corner, Mr Son is finally starting to dispel the notion that his Japanese technology conglomerate is risk-addicted and debt-laden. So flush is Mr Son feeling that he launched a $5.5bn share buyback in February.

“Until now, SoftBank was viewed as a group loaded with debt and doing dangerous things,” Mr Son said in February. “In time, all that noise will go away.”

Mr Son has consistently complained that investors do not appreciate the group’s true worth. In February, when its market capitalisation was ¥9tn ($80bn), he argued that SoftBank shares were undervalued by nearly 60 per cent. His calculations put the company’s net debt at ¥3.6tn and its trove of equity holdings including Alibaba, WeWork and Uber at ¥25tn, implying ¥21tn of value for shareholders.

Now, more investors are beginning to buy into his view.

Since the public offering on December 19 of stock in its mobile subsidiary, SoftBank Group shares have risen 41 per cent to a 19-year high.

The cost of five-year …