Credit Suisse won’t be working with SoftBank Group, which backs Lex Greensill’s collapsed supply chain finance empire. It also won’t be letting clients withdraw all their cash from a fund that invests with Renaissance Technologies, since that strategy didn’t work out and led to losses of investors.
Credit Suisse will also be looking at retention bonuses for top performers in an attempt to get a new level of stability. Defections have been rising since the Greensill incident, along with the falling-out of Bill Hwang’s Archegos Capital Management — the latter of which led to a loss of 900 million francs in the first quarter, pre-tax.
New chair António Horta-Osório took the chair from Urs Rohner last month. He has said he’s looking to put in place a large review that could help with the bank’s situation after it had to suspend billions in funds it had managed with Greensill. Credit Suisse was a central funding source for Greensill.
The Greensill incident started when Credit Suisse conducted an internal review and found that several SoftBank portfolio companies received loans from supply-chain funds at Credit Suisse. As SoftBank was also an investor in Credit Suisse, there were fears of conflict of interest. With the overlap, officials wondered whether SoftBank had been using the funds to prop up some of its Vision Fund investments, including Greensill. SoftBank then wrote down the $1.5 billion Greensill holding to near-zero.
Now some of the firm’s best talent is looking at potentially leaving, including Alejandro Przygoda, one of the top financial services bankers there, who will join Jefferies Financial Group, and at least three others are reported to be leaving Credit Suisse.
There have also been departures recently of around four other members who have joined such institutions as Barclays, Bank of America and Goldman Sachs.
The Greensill collapse also made it so Credit Suisse had to freeze four Luxembourg-based funds that had each put in $10 billion in supply chain finance.
The affected funds are Credit Suisse (Lux) Multi-Strategy Bond Fund, Credit Suisse (Lux) Multi-Strategy Alternative Fund, Credit Suisse (Lux) Qatar Enhanced Short Duration Fund and Credit Suisse (Lux) Institutional Target Volatility Fund, according to a report.