Investments

Credit Suisse Eyes Its Supply Chain Finance Funds Amid Investor Scrutiny

Credit Suisse Group has started to look into funds invested in loans arranged by billionaire Lex Greensill and backed by Masayoshi Son's SoftBank Vision Fund, Bloomberg reports.

The largest Switzerland bank is looking into its supply chain finance funds, which hold short-term corporate loans and aid a number of startups backed by Vision Fund.

Those loans, according to an unnamed source interviewed by Bloomberg, are sourced by Greensill Capital, which is also backed by SoftBank.

A representative for Credit Suisse Group said the bank is “reviewing certain aspects of the matter, as is standard practice in similar circumstances,” according to Bloomberg.

The reason for the increased interest is the $500 million SoftBank invested into the funds, which investors think could represent a conflict of interest.

Credit Suisse CEO Thomas Gottstein and the firm as a whole have maintained that there is no conflict of interest.

“There is no conflict of interest: Investments made in the funds and the investment decisions made by the funds are separate. Credit Suisse Asset Management has full discretion on credit selection. In addition, strict investment and diversification rules are applied, and the funds are only distributed to qualified investors,” the bank said in a statement last week, Bloomberg reported.

Greensill, the former Morgan Stanley banker, worked in 2017 with Credit Suisse on investment funds that bought corporate invoices so companies could pay early and boost cash flow. Last year, SoftBank invested almost $1.5 billion in Greensill Capital, Bloomberg reported.

Supply chain finance has been a big industry for Credit Suisse, which reported 437.9 Swiss francs, or $454 billion, at the end of last year.

SoftBank’s Vision Fund was on track to lose $16.5 billion for the fiscal year ending March 31, marking the first time the bank as a whole had lost money in its 15 years of existence. Son said the reason was because of the deteriorated economic conditions of the pandemic, calling it a “major blow.” SoftBank had also taken a hit earlier this year in dropping its WeWork investment.

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