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Carney Blasts Funds With Illiquid Assets, Piling Pressure on H2O

  • Funds saw biggest single-day asset drop since inception
  • Money manager said net outflows have slowed since Monday
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Bank of England Governor Mark Carney reprimanded investment funds that hold illiquid assets but allow unlimited withdrawals, adding to pressure on firms like H2O Asset Management.

"These funds are built on a lie, which is that you can have daily liquidity, and that for assets that fundamentally aren’t liquid,” Carney told a parliamentary committee on Wednesday. “That leads to an expectation of individuals that it’s not that different than having money in a bank. You get a series of problems, you get a structural problem but then you get a consumer issue.”