Natixis is down about 6% today (Stoxx600 banks is down 0.7%). This follows the FT’s article on Tuesday regarding one of Natixis’ flagship asset managers (H2O).

Yesterday, Morningstar has suspended its rating on the Allegro fund because of its holdings of illiquid bonds. Natixis owns 50.01% of the fund manager which manages about €30bn AuMs. It’s one of Natixis’ main boutiques which has recently grown exponentially. Natixis has built its model via the aggregation of several boutiques in which it owns a majority.

According to a FT article on Tuesday, H2O owns about €1.4bn of illiquid bonds linked to German financier Mr Windhorst (in six funds that allow for daily liquidity).

On top of this, H2O’s founder, Didier Crastes, recently joined a new advisory board of Mr Windhorst’s, Tennor Holding. This mechanically raises a possible conflict of interest. Morningstar’s announcement could/will accelerate outflows from H2O’s funds.

We calculate that H2O’s contribution to Natixis’ NBI is roughly equal to €150m (0.5% management fees) and makes 5% of NIM’s operating profit (€50m). In the end, as Natixis owns 50.01% of the company, the contribution to total earnings is in the area of 2% (after tax).

Natixis has grown its AM business via the acquisition of boutiques that remain independent in every way. H2O is one of Natixis’ main flagships with €30bn AuM together with DNCA (€23.2bn), AEM (€65bn) Loomis (roughly $267bn AuM), Harris (about $141bn) and Ostrum (ex NAM with €320bn AuM).

Whereas there will be some outflows at H2O, it remains to be seen whether this will impact other boutiques and, more importantly, to what extent it will affect Natixis’ specific multi-boutique model