Credit Suisse has suspended redemptions and subscriptions on a range of investments linked to the Softbank-backed finance firm Greensill Capital.
Greensill Capital is the brainchild of former Citigroup and Morgan Stanley financier Lex Greensill and it employs former PM David Cameron as an adviser. Greensill specialises in supply-chain finance where businesses borrow money to pay for bills.
Credit Suisse’s asset management division said: “In order to protect the interests of all investors in the Credit Suisse supply chain finance funds, Credit Suisse Asset Management fund boards have suspended the redemptions and subscriptions in these funds.”
“It is the fiduciary responsibility of Credit Suisse Asset Management to act in the best interest of investors in its funds. A certain part of the Subfunds’ assets is currently subject to considerable uncertainties with respect to their accurate valuation,” the bank added.
A spokesman for Greensill said: “Greensill acknowledges the decision by Credit Suisse to temporarily gate Supply Chain Finance Funds dealing in Greensill-sourced assets. We remain in advanced talks with potential outside investors in our company and hope to be able to update further on that process imminently.”
Last year Greensill, which says it is “making finance fairer” was hit after a number of its clients defaulted on their debts amid high-profile collapses and accounting scandals.
The firm had arranged funding for hospital operator NMC Health and “rent-to-own” BrightHouse. It meant Greensill and a group of insurers were forced to cover the losses in funds managed by Credit Suisse.
Last year the Financial Times revealed the firm received more than $500m funding from Softbank and Credit Suisse subsequently launched a review into its funds.
The Credit Suisse funds are reported to have exposure linked to businessman Sanjeev Gupta who is one of Greensill’s biggest clients. The German regulator is pushing a Greensill banking subsidiary to reduce its exposure to the businessman’s firms, causing concern at the Swiss bank, according to the Financial Times.
Last week a bid by one of Gupta’s companies to acquire steel company Thyssenkrupp AG failed after the company ended talks.