H2O Asset Management Founder Defends 'Deep Value' Fund

H2O Asset Management co-founder Vincent Chailley defended his firm’s “deep value debt” in a video posted on its website Friday, referring to the unlisted bonds that have triggered mass investor redemptions, contributing to an almost 8 billion-euro ($9.1 billion) slide in assets. H20 won’t sell unless there’s an attractive bid, he said. It’s also planning to set up a new fund specializing in “deep value” securities.

In its simplest form, deep value investing means buying assets whose market price is below their intrinsic value. Warren Buffett is the world’s most famous "value investor" because he buys companies that he thinks have underappreciated attributes and is willing to own them for years. Hedge funds try to do a similar thing using a range of financial instruments.