Finance

Credit Suisse to shutter suspended funds with $10bn exposure to Greensill

Credit Suisse Asset Management has said it will terminate four funds valued at $10bn which it suspended on 1 March over uncertainty over their valuation.

The four funds invested in assets created by supply chain financing firm Greensill Capital. The four funds were suspended on 1 March after Credit Suisse became concerned that the funds were over-exposed to one of Greensill’s clients — steel magnate Sanjeev Gupta.

Credit Suisse said in a 5 March statement that the fund boards had now decided to terminate the funds effective 4 March.

The Swiss lender made the decision to suspend and then terminate the funds because of the valuation uncertainty of some of the funds’ investments, the reduced availability of insurance coverage for new investments and the challenge of finding suitable investments.

Credit Suisse’s suspension of the funds on 1 March plunged supply chain finance business Greensill into crisis. Greensill Capital – which has Japanese tech fund SoftBank as its main financial backer – counts former UK prime minister David Cameron as an adviser. The firm now looks set to file for insolvency in the UK this week. Meanwhile, its German unit was ordered to close by regulators on 3 March.

READ  Greensill Capital: How the SoftBank-backed firm ended up on the brink

Credit Suisse said the first payments amounting to approximately 80% of available cash and cash equivalents are expected on 8 March for its three Luxembourg domiciled funds, with payments later in the same week for the Liechtenstein domiciled fund. Payments will be made in instalments.

Credit Suisse said all shares of the funds will be compulsorily redeemed pro-rata to the funds’ assets. It said pending redemption requests would be cancelled. Management fees for the funds would be waived with immediate effect.

READ  German watchdog orders Greensill Bank to close, halts firm’s acceptance of new payments

The supply chain firm’s main financial backer is Japanese tech fund SoftBank and it counts former UK prime minister David Cameron as an adviser.

To contact the author of this story with feedback or news, email James Booth

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